Correlation Between Everest and Mawson Infrastructure
Can any of the company-specific risk be diversified away by investing in both Everest 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 Everest and Mawson Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everest Group and Mawson Infrastructure Group, you can compare the effects of market volatilities on Everest 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 Everest with a short position of Mawson Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everest and Mawson Infrastructure.
Diversification Opportunities for Everest and Mawson Infrastructure
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Everest and Mawson is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and Mawson Infrastructure Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawson Infrastructure and Everest 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 Everest Group 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 Everest i.e., Everest and Mawson Infrastructure go up and down completely randomly.
Pair Corralation between Everest and Mawson Infrastructure
Allowing for the 90-day total investment horizon Everest Group is expected to generate 0.35 times more return on investment than Mawson Infrastructure. However, Everest Group is 2.83 times less risky than Mawson Infrastructure. It trades about -0.3 of its potential returns per unit of risk. Mawson Infrastructure Group is currently generating about -0.7 per unit of risk. If you would invest 37,300 in Everest Group on November 28, 2024 and sell it today you would lose (2,980) from holding Everest Group or give up 7.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everest Group vs. Mawson Infrastructure Group
Performance |
| Timeline |
| Everest Group |
| Mawson Infrastructure |
Everest and Mawson Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everest and Mawson Infrastructure
The main advantage of trading using opposite Everest and Mawson Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest 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.| Everest vs. Fomento Economico Mexicano | Everest vs. Keurig Dr Pepper | Everest vs. National Beverage Corp | Everest vs. Compania Cervecerias Unidas |
| Mawson Infrastructure vs. Terawulf | Mawson Infrastructure vs. Iris Energy | Mawson Infrastructure vs. Stronghold Digital Mining | Mawson Infrastructure vs. Argo Blockchain PLC |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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