Correlation Between Capital Clean and Hafnia
Can any of the company-specific risk be diversified away by investing in both Capital Clean 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 Capital Clean and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Hafnia Limited, you can compare the effects of market volatilities on Capital Clean 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 Capital Clean with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Hafnia.
Diversification Opportunities for Capital Clean and Hafnia
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Hafnia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Capital Clean 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 Capital Clean Energy 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 Capital Clean i.e., Capital Clean and Hafnia go up and down completely randomly.
Pair Corralation between Capital Clean and Hafnia
Given the investment horizon of 90 days Capital Clean Energy is expected to generate 0.95 times more return on investment than Hafnia. However, Capital Clean Energy is 1.06 times less risky than Hafnia. It trades about 0.04 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.2 per unit of risk. If you would invest 1,761 in Capital Clean Energy on August 30, 2024 and sell it today you would earn a total of 73.00 from holding Capital Clean Energy or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Hafnia Limited
Performance |
| Timeline |
| Capital Clean Energy |
| Hafnia Limited |
Capital Clean and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Hafnia
The main advantage of trading using opposite Capital Clean and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean 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.| Capital Clean vs. Mink Therapeutics | Capital Clean vs. EvoAir Holdings | Capital Clean vs. Mind Medicine | Capital Clean vs. Westinghouse Air Brake |
| Hafnia vs. Comstock Holding Companies | Hafnia vs. SEI Investments | Hafnia vs. Chester Mining | Hafnia vs. Link Real Estate |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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