Correlation Between Mawson Infrastructure and Freedom Holding

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

Diversification Opportunities for Mawson Infrastructure and Freedom Holding

0.19

Correlation Coefficient

Mawson Infrastructure  Freedom Holding

Average diversification

The 3 months correlation between Mawson and Freedom is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mawson Infrastructure Group and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding 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 Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of Mawson Infrastructure i.e., Mawson Infrastructure and Freedom Holding go up and down completely randomly.

Pair Corralation between Mawson Infrastructure and Freedom Holding

Given the investment horizon of 90 days Mawson Infrastructure Group is expected to generate 9.08 times more return on investment than Freedom Holding. However, Mawson Infrastructure is 9.08 times more volatile than Freedom Holding Corp. It trades about 0.07 of its potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.25 per unit of risk. If you would invest  117.00  in Mawson Infrastructure Group on September 21, 2024 and sell it today you would lose (16.00) from holding Mawson Infrastructure Group or give up 13.68% of portfolio value over 90 days.

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

Mawson Infrastructure Group  vs.  Freedom Holding Corp

Mawson Infrastructure

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mawson Infrastructure Group are ranked lower than 5 (%) 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.

Freedom Holding Corp

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Holding Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical indicators, Freedom Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mawson Infrastructure and Freedom Holding

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

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