Correlation Between Mawson Infrastructure and Houlihan Lokey

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

Diversification Opportunities for Mawson Infrastructure and Houlihan Lokey

0.54

Correlation Coefficient

Mawson Infrastructure  Houlihan Lokey

Very weak diversification

The 3 months correlation between Mawson and Houlihan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mawson Infrastructure Group and Houlihan Lokey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houlihan Lokey 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 Houlihan Lokey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Houlihan Lokey has no effect on the direction of Mawson Infrastructure i.e., Mawson Infrastructure and Houlihan Lokey go up and down completely randomly.

Pair Corralation between Mawson Infrastructure and Houlihan Lokey

Given the investment horizon of 90 days Mawson Infrastructure Group is expected to generate 7.21 times more return on investment than Houlihan Lokey. However, Mawson Infrastructure is 7.21 times more volatile than Houlihan Lokey. It trades about 0.03 of its potential returns per unit of risk. Houlihan Lokey is currently generating about 0.1 per unit of risk. If you would invest  251.00  in Mawson Infrastructure Group on November 19, 2024 and sell it today you would lose (186.00) from holding Mawson Infrastructure Group or give up 74.1% of portfolio value over 90 days.

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

Mawson Infrastructure Group  vs.  Houlihan Lokey

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.

Houlihan Lokey

Risk-Adjusted Performance

Very Weak

Over the last 90 days Houlihan Lokey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Houlihan Lokey is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Mawson Infrastructure and Houlihan Lokey

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

The idea behind Mawson Infrastructure Group and Houlihan Lokey 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.