Correlation Between Mawson Infrastructure and CreditRiskMonitor

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

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

Diversification Opportunities for Mawson Infrastructure and CreditRiskMonitor

0.77

Correlation Coefficient

Mawson Infrastructure  CreditRiskMonitor

Poor diversification

The 3 months correlation between Mawson and CreditRiskMonitor is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mawson Infrastructure Group and CreditRiskMonitorCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CreditRiskMonitorCom and Mawson Infrastructure 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 Mawson Infrastructure Group are associated (or correlated) with CreditRiskMonitor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CreditRiskMonitorCom has no effect on the direction of Mawson Infrastructure i.e., Mawson Infrastructure and CreditRiskMonitor go up and down completely randomly.

Pair Corralation between Mawson Infrastructure and CreditRiskMonitor

Given the investment horizon of 90 days Mawson Infrastructure Group is expected to under-perform the CreditRiskMonitor. In addition to that, Mawson Infrastructure is 5.3 times more volatile than CreditRiskMonitorCom. It trades about -0.08 of its total potential returns per unit of risk. CreditRiskMonitorCom is currently generating about -0.13 per unit of volatility. If you would invest  345.00  in CreditRiskMonitorCom on November 28, 2024 and sell it today you would lose (78.00) from holding CreditRiskMonitorCom or give up 22.61% of portfolio value over 90 days.

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

Mawson Infrastructure Group  vs.  CreditRiskMonitorCom

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 March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

CreditRiskMonitorCom

Risk-Adjusted Performance

Very Weak

Over the last 90 days CreditRiskMonitorCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mawson Infrastructure and CreditRiskMonitor

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

The idea behind Mawson Infrastructure Group and CreditRiskMonitorCom 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.