Correlation Between Mynaric AG and HP

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

Diversification Opportunities for Mynaric AG and HP

0.46

Correlation Coefficient

Mynaric AG  HP

Very weak diversification

The 3 months correlation between Mynaric and HP is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc 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 HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of Mynaric AG i.e., Mynaric AG and HP go up and down completely randomly.

Pair Corralation between Mynaric AG and HP

Given the investment horizon of 90 days Mynaric AG ADR is expected to under-perform the HP. In addition to that, Mynaric AG is 17.21 times more volatile than HP Inc. It trades about -0.04 of its total potential returns per unit of risk. HP Inc is currently generating about -0.13 per unit of volatility. If you would invest  3,294  in HP Inc on December 27, 2024 and sell it today you would lose (430.00) from holding HP Inc or give up 13.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	62.3%
Values	Daily Returns

Mynaric AG ADR  vs.  HP Inc

Mynaric AG ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mynaric AG ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

HP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mynaric AG and HP

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

The idea behind Mynaric AG ADR and HP Inc 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.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.