Correlation Between Mynaric AG and Fabrinet
Can any of the company-specific risk be diversified away by investing in both Mynaric AG and Fabrinet 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 Fabrinet 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 Fabrinet, you can compare the effects of market volatilities on Mynaric AG and Fabrinet 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 Fabrinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mynaric AG and Fabrinet.
Diversification Opportunities for Mynaric AG and Fabrinet
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mynaric and Fabrinet is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet 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 Fabrinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabrinet has no effect on the direction of Mynaric AG i.e., Mynaric AG and Fabrinet go up and down completely randomly.
Pair Corralation between Mynaric AG and Fabrinet
Given the investment horizon of 90 days Mynaric AG ADR is expected to under-perform the Fabrinet. But the stock apears to be less risky and, when comparing its historical volatility, Mynaric AG ADR is 1.38 times less risky than Fabrinet. The stock trades about -0.05 of its potential returns per unit of risk. The Fabrinet is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 23,961 in Fabrinet on September 5, 2024 and sell it today you would lose (423.00) from holding Fabrinet or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mynaric AG ADR vs. Fabrinet
Performance |
| Timeline |
| Mynaric AG ADR |
| Fabrinet |
Mynaric AG and Fabrinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mynaric AG and Fabrinet
The main advantage of trading using opposite Mynaric AG and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mynaric AG position performs unexpectedly, Fabrinet 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 Fabrinet will offset losses from the drop in Fabrinet's long position.| Mynaric AG vs. Fabrinet | Mynaric AG vs. Kimball Electronics | Mynaric AG vs. Knowles Cor | Mynaric AG vs. Ubiquiti Networks |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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