Correlation Between Donnelley Financial and Mawson Infrastructure

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

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

Diversification Opportunities for Donnelley Financial and Mawson Infrastructure

0.74

Correlation Coefficient

Donnelley Financial  Mawson Infrastructure

Poor diversification

The 3 months correlation between Donnelley and Mawson is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Donnelley Financial Solutions and Mawson Infrastructure Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawson Infrastructure and Donnelley Financial 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 Donnelley Financial Solutions 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 Donnelley Financial i.e., Donnelley Financial and Mawson Infrastructure go up and down completely randomly.

Pair Corralation between Donnelley Financial and Mawson Infrastructure

Given the investment horizon of 90 days Donnelley Financial Solutions is expected to generate 0.58 times more return on investment than Mawson Infrastructure. However, Donnelley Financial Solutions is 1.72 times less risky than Mawson Infrastructure. It trades about -0.15 of its potential returns per unit of risk. Mawson Infrastructure Group is currently generating about -0.12 per unit of risk. If you would invest  6,295  in Donnelley Financial Solutions on December 30, 2024 and sell it today you would lose (1,909) from holding Donnelley Financial Solutions or give up 30.33% of portfolio value over 90 days.

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

Donnelley Financial Solutions  vs.  Mawson Infrastructure Group

Donnelley Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Donnelley Financial Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Mawson Infrastructure

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Donnelley Financial and Mawson Infrastructure

The main advantage of trading using opposite Donnelley Financial and Mawson Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donnelley Financial 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 Donnelley Financial Solutions 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.