Correlation Between Science Applications and Hafnia
Can any of the company-specific risk be diversified away by investing in both Science Applications and Hafnia 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 Science Applications and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Applications International and Hafnia Limited, you can compare the effects of market volatilities on Science Applications and Hafnia 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 Science Applications with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and Hafnia.
Diversification Opportunities for Science Applications and Hafnia
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Science and Hafnia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Science Applications 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 Science Applications International are associated (or correlated) with Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Science Applications i.e., Science Applications and Hafnia go up and down completely randomly.
Pair Corralation between Science Applications and Hafnia
Assuming the 90 days trading horizon Science Applications is expected to generate 3.41 times less return on investment than Hafnia. But when comparing it to its historical volatility, Science Applications International is 1.57 times less risky than Hafnia. It trades about 0.02 of its potential returns per unit of risk. Hafnia Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 325.00 in Hafnia Limited on September 12, 2024 and sell it today you would earn a total of 173.00 from holding Hafnia Limited or generate 53.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Science Applications Internati vs. Hafnia Limited
Performance |
| Timeline |
| Science Applications |
| Hafnia Limited |
Science Applications and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science Applications and Hafnia
The main advantage of trading using opposite Science Applications and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Applications position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's long position.| Science Applications vs. Apple Inc | Science Applications vs. Apple Inc | Science Applications vs. Apple Inc | Science Applications vs. Apple Inc |
| Hafnia vs. Superior Plus Corp | Hafnia vs. SIVERS SEMICONDUCTORS AB | Hafnia vs. CHINA HUARONG ENERHD 50 | Hafnia vs. NORDIC HALIBUT AS |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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