Correlation Between Comtech Telecommunicatio and Mynaric AG

Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio 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 Comtech Telecommunicatio and Mynaric AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Comtech Telecommunications Corp and Mynaric AG ADR, you can compare the effects of market volatilities on Comtech Telecommunicatio 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 Comtech Telecommunicatio with a short position of Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Mynaric AG.

Diversification Opportunities for Comtech Telecommunicatio and Mynaric AG

0.23

Correlation Coefficient

Comtech Telecommunicatio  Mynaric AG

Modest diversification

The 3 months correlation between Comtech and Mynaric is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor 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 Comtech Telecommunicatio 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 Comtech Telecommunications Corp 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 Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Mynaric AG go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and Mynaric AG

Given the investment horizon of 90 days Comtech Telecommunicatio is expected to generate 1.81 times less return on investment than Mynaric AG. In addition to that, Comtech Telecommunicatio is 1.11 times more volatile than Mynaric AG ADR. It trades about 0.06 of its total potential returns per unit of risk. Mynaric AG ADR is currently generating about 0.12 per unit of volatility. If you would invest  98.00  in Mynaric AG ADR on August 30, 2024 and sell it today you would earn a total of  41.00  from holding Mynaric AG ADR or generate 41.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Comtech Telecommunications Cor  vs.  Mynaric AG ADR

Comtech Telecommunicatio

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Comtech Telecommunicatio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Mynaric AG ADR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mynaric AG ADR are ranked lower than 9 (%) 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.

Pair Trading with Comtech Telecommunicatio and Mynaric AG

The main advantage of trading using opposite Comtech Telecommunicatio and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio 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.

The idea behind Comtech Telecommunications Corp and Mynaric AG ADR 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.