Correlation Between Mynaric AG and ClearOne

Can any of the company-specific risk be diversified away by investing in both Mynaric AG and ClearOne 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 ClearOne 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 ClearOne, you can compare the effects of market volatilities on Mynaric AG and ClearOne 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 ClearOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mynaric AG and ClearOne.

Diversification Opportunities for Mynaric AG and ClearOne

-0.09

Correlation Coefficient

Mynaric AG  ClearOne

Good diversification

The 3 months correlation between Mynaric and ClearOne is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and ClearOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearOne 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 ClearOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearOne has no effect on the direction of Mynaric AG i.e., Mynaric AG and ClearOne go up and down completely randomly.

Pair Corralation between Mynaric AG and ClearOne

Given the investment horizon of 90 days Mynaric AG ADR is expected to generate 2.33 times more return on investment than ClearOne. However, Mynaric AG is 2.33 times more volatile than ClearOne. It trades about 0.13 of its potential returns per unit of risk. ClearOne is currently generating about -0.03 per unit of risk. If you would invest  94.00  in Mynaric AG ADR on September 2, 2024 and sell it today you would earn a total of  45.00  from holding Mynaric AG ADR or generate 47.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mynaric AG ADR  vs.  ClearOne

Mynaric AG ADR

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mynaric AG ADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Mynaric AG sustained solid returns over the last few months and may actually be approaching a breakup point.

ClearOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ClearOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ClearOne is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mynaric AG and ClearOne

The main advantage of trading using opposite Mynaric AG and ClearOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mynaric AG position performs unexpectedly, ClearOne 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 ClearOne will offset losses from the drop in ClearOne's long position.

The idea behind Mynaric AG ADR and ClearOne pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.