Correlation Between Mynaric AG and Vishay Intertechnology

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

Diversification Opportunities for Mynaric AG and Vishay Intertechnology

-0.39

Correlation Coefficient

Mynaric AG  Vishay Intertechnology

Very good diversification

The 3 months correlation between Mynaric and Vishay is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mynaric AG ADR and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of Mynaric AG i.e., Mynaric AG and Vishay Intertechnology go up and down completely randomly.

Pair Corralation between Mynaric AG and Vishay Intertechnology

Given the investment horizon of 90 days Mynaric AG ADR is expected to generate 2.66 times more return on investment than Vishay Intertechnology. However, Mynaric AG is 2.66 times more volatile than Vishay Intertechnology. It trades about 0.14 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.02 per unit of risk. If you would invest  94.00  in Mynaric AG ADR on September 3, 2024 and sell it today you would earn a total of  50.00  from holding Mynaric AG ADR or generate 53.19% 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.  Vishay Intertechnology

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 conflicting basic indicators, Mynaric AG sustained solid returns over the last few months and may actually be approaching a breakup point.

Vishay Intertechnology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Mynaric AG and Vishay Intertechnology

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

The idea behind Mynaric AG ADR and Vishay Intertechnology 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.