Correlation Between Mynaric AG and Impinj

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

Diversification Opportunities for Mynaric AG and Impinj

0.76

Correlation Coefficient

Mynaric AG  Impinj

Poor diversification

The 3 months correlation between Mynaric and Impinj is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj 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 Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of Mynaric AG i.e., Mynaric AG and Impinj go up and down completely randomly.

Pair Corralation between Mynaric AG and Impinj

Given the investment horizon of 90 days Mynaric AG ADR is expected to generate 8.19 times more return on investment than Impinj. However, Mynaric AG is 8.19 times more volatile than Impinj Inc. It trades about 0.03 of its potential returns per unit of risk. Impinj Inc is currently generating about -0.43 per unit of risk. If you would invest  145.00  in Mynaric AG ADR on October 5, 2024 and sell it today you would lose (60.00) from holding Mynaric AG ADR or give up 41.38% of portfolio value over 90 days.

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

Mynaric AG ADR  vs.  Impinj Inc

Mynaric AG ADR

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Mynaric AG ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat conflicting basic indicators, Mynaric AG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impinj Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Mynaric AG and Impinj

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

The idea behind Mynaric AG ADR and Impinj 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.