Correlation Between Mawson Infrastructure and World Technology

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

Diversification Opportunities for Mawson Infrastructure and World Technology

-0.56

Correlation Coefficient

Mawson Infrastructure  World Technology

Excellent diversification

The 3 months correlation between Mawson and World is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mawson Infrastructure Group and World Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Technology Corp 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 World Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Technology Corp has no effect on the direction of Mawson Infrastructure i.e., Mawson Infrastructure and World Technology go up and down completely randomly.

Pair Corralation between Mawson Infrastructure and World Technology

Given the investment horizon of 90 days Mawson Infrastructure is expected to generate 1.39 times less return on investment than World Technology. In addition to that, Mawson Infrastructure is 1.04 times more volatile than World Technology Corp. It trades about 0.03 of its total potential returns per unit of risk. World Technology Corp is currently generating about 0.05 per unit of volatility. If you would invest  41.00  in World Technology Corp on October 20, 2024 and sell it today you would lose (6.00) from holding World Technology Corp or give up 14.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.04%
Values	Daily Returns

Mawson Infrastructure Group  vs.  World Technology Corp

Mawson Infrastructure

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mawson Infrastructure Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Mawson Infrastructure demonstrated solid returns over the last few months and may actually be approaching a breakup point.

World Technology Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in World Technology Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, World Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mawson Infrastructure and World Technology

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

The idea behind Mawson Infrastructure Group and World Technology Corp 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.