Correlation Between Optical Cable and Mynaric AG
Can any of the company-specific risk be diversified away by investing in both Optical Cable and Mynaric AG 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 Optical Cable and Mynaric AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optical Cable and Mynaric AG ADR, you can compare the effects of market volatilities on Optical Cable and Mynaric AG 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 Optical Cable with a short position of Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optical Cable and Mynaric AG.
Diversification Opportunities for Optical Cable and Mynaric AG
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Optical and Mynaric is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Optical Cable and Mynaric AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mynaric AG ADR and Optical Cable 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 Optical Cable are associated (or correlated) with Mynaric AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mynaric AG ADR has no effect on the direction of Optical Cable i.e., Optical Cable and Mynaric AG go up and down completely randomly.
Pair Corralation between Optical Cable and Mynaric AG
Considering the 90-day investment horizon Optical Cable is expected to generate 8.54 times more return on investment than Mynaric AG. However, Optical Cable is 8.54 times more volatile than Mynaric AG ADR. It trades about 0.04 of its potential returns per unit of risk. Mynaric AG ADR is currently generating about -0.04 per unit of risk. If you would invest 410.00 in Optical Cable on August 31, 2024 and sell it today you would lose (177.00) from holding Optical Cable or give up 43.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optical Cable vs. Mynaric AG ADR
Performance |
| Timeline |
| Optical Cable |
| Mynaric AG ADR |
Optical Cable and Mynaric AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optical Cable and Mynaric AG
The main advantage of trading using opposite Optical Cable and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optical Cable position performs unexpectedly, Mynaric AG 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 Mynaric AG will offset losses from the drop in Mynaric AG's long position.| Optical Cable vs. KVH Industries | Optical Cable vs. Knowles Cor | Optical Cable vs. Comtech Telecommunications Corp | Optical Cable vs. Lantronix |
| Mynaric AG vs. Comtech Telecommunications Corp | Mynaric AG vs. KVH Industries | Mynaric AG vs. Silicom | Mynaric AG vs. Knowles Cor |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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