Correlation Between Aquagold International and Mawson Infrastructure

Can any of the company-specific risk be diversified away by investing in both Aquagold International and Mawson Infrastructure 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 Aquagold International and Mawson Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquagold International and Mawson Infrastructure Group, you can compare the effects of market volatilities on Aquagold International and Mawson Infrastructure 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 Aquagold International with a short position of Mawson Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Mawson Infrastructure.

Diversification Opportunities for Aquagold International and Mawson Infrastructure

0.46

Correlation Coefficient

Aquagold International  Mawson Infrastructure

Very weak diversification

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

Pair Corralation between Aquagold International and Mawson Infrastructure

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Mawson Infrastructure. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aquagold International is 1.81 times less risky than Mawson Infrastructure. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Mawson Infrastructure Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  282.00  in Mawson Infrastructure Group on October 3, 2024 and sell it today you would lose (199.00) from holding Mawson Infrastructure Group or give up 70.57% of portfolio value over 90 days.

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

Aquagold International  vs.  Mawson Infrastructure Group

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic 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.

Mawson Infrastructure

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mawson Infrastructure Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Mawson Infrastructure demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Mawson Infrastructure

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

The idea behind Aquagold International and Mawson Infrastructure Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.