Correlation Between Creek Road and Mawson Infrastructure

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

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

Diversification Opportunities for Creek Road and Mawson Infrastructure

0.23

Correlation Coefficient

Creek Road  Mawson Infrastructure

Modest diversification

The 3 months correlation between Creek and Mawson is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Creek Road Miners and Mawson Infrastructure Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawson Infrastructure and Creek Road 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 Creek Road Miners 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 Creek Road i.e., Creek Road and Mawson Infrastructure go up and down completely randomly.

Pair Corralation between Creek Road and Mawson Infrastructure

If you would invest  117.00  in Mawson Infrastructure Group on September 17, 2024 and sell it today you would earn a total of  7.00  from holding Mawson Infrastructure Group or generate 5.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Creek Road Miners  vs.  Mawson Infrastructure Group

Creek Road Miners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creek Road Miners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Creek Road is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Mawson Infrastructure

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mawson Infrastructure Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Mawson Infrastructure demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creek Road and Mawson Infrastructure

The main advantage of trading using opposite Creek Road and Mawson Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creek Road 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 Creek Road Miners 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.