Correlation Between Mawson Infrastructure and Xp

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

Diversification Opportunities for Mawson Infrastructure and Xp

0.36

Correlation Coefficient

Mawson Infrastructure  Xp

Weak diversification

The 3 months correlation between Mawson and Xp is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mawson Infrastructure Group and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Mawson Infrastructure i.e., Mawson Infrastructure and Xp go up and down completely randomly.

Pair Corralation between Mawson Infrastructure and Xp

Given the investment horizon of 90 days Mawson Infrastructure Group is expected to generate 4.95 times more return on investment than Xp. However, Mawson Infrastructure is 4.95 times more volatile than Xp Inc. It trades about 0.07 of its potential returns per unit of risk. Xp Inc is currently generating about -0.06 per unit of risk. If you would invest  64.00  in Mawson Infrastructure Group on October 1, 2024 and sell it today you would earn a total of  28.00  from holding Mawson Infrastructure Group or generate 43.75% return on investment over 90 days.

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

Mawson Infrastructure Group  vs.  Xp Inc

Mawson Infrastructure

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mawson Infrastructure Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, Mawson Infrastructure demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Xp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mawson Infrastructure and Xp

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

The idea behind Mawson Infrastructure Group and Xp Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.