Correlation Between Mynaric AG and Credo Technology
Can any of the company-specific risk be diversified away by investing in both Mynaric AG and Credo Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mynaric AG and Credo Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mynaric AG ADR and Credo Technology Group, you can compare the effects of market volatilities on Mynaric AG and Credo Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mynaric AG with a short position of Credo Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mynaric AG and Credo Technology.
Diversification Opportunities for Mynaric AG and Credo Technology
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mynaric and Credo is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and Credo Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credo Technology and Mynaric AG is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mynaric AG ADR are associated (or correlated) with Credo Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credo Technology has no effect on the direction of Mynaric AG i.e., Mynaric AG and Credo Technology go up and down completely randomly.
Pair Corralation between Mynaric AG and Credo Technology
Given the investment horizon of 90 days Mynaric AG ADR is expected to under-perform the Credo Technology. In addition to that, Mynaric AG is 1.51 times more volatile than Credo Technology Group. It trades about -0.02 of its total potential returns per unit of risk. Credo Technology Group is currently generating about 0.07 per unit of volatility. If you would invest 1,863 in Credo Technology Group on November 1, 2024 and sell it today you would earn a total of 4,016 from holding Credo Technology Group or generate 215.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mynaric AG ADR vs. Credo Technology Group
Performance |
| Timeline |
| Mynaric AG ADR |
| Credo Technology |
Mynaric AG and Credo Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mynaric AG and Credo Technology
The main advantage of trading using opposite Mynaric AG and Credo Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mynaric AG position performs unexpectedly, Credo Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Credo Technology will offset losses from the drop in Credo Technology's long position.| Mynaric AG vs. Comtech Telecommunications Corp | Mynaric AG vs. KVH Industries | Mynaric AG vs. Silicom | Mynaric AG vs. Knowles Cor |
| Credo Technology vs. Zebra Technologies | Credo Technology vs. Ubiquiti Networks | Credo Technology vs. Ciena Corp | Credo Technology vs. Clearfield |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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