Correlation Between BW LPG and Hafnia
Can any of the company-specific risk be diversified away by investing in both BW LPG 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 BW LPG and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW LPG and Hafnia Limited, you can compare the effects of market volatilities on BW LPG 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 BW LPG with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW LPG and Hafnia.
Diversification Opportunities for BW LPG and Hafnia
Good diversification
The 3 months correlation between BWLLY and Hafnia is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding BW LPG and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and BW LPG 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 BW LPG 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 BW LPG i.e., BW LPG and Hafnia go up and down completely randomly.
Pair Corralation between BW LPG and Hafnia
Assuming the 90 days horizon BW LPG is expected to under-perform the Hafnia. In addition to that, BW LPG is 8.62 times more volatile than Hafnia Limited. It trades about -0.12 of its total potential returns per unit of risk. Hafnia Limited is currently generating about -0.55 per unit of volatility. If you would invest 843.00 in Hafnia Limited on September 3, 2024 and sell it today you would lose (13.00) from holding Hafnia Limited or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.11% |
| Values | Daily Returns |
BW LPG vs. Hafnia Limited
Performance |
| Timeline |
| BW LPG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hafnia Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BW LPG and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW LPG and Hafnia
The main advantage of trading using opposite BW LPG and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW LPG 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.| BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. Pacific Basin Shipping | BW LPG vs. Hapag Lloyd Aktiengesellschaft | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |