Correlation Between Compass Digital and Hafnia
Can any of the company-specific risk be diversified away by investing in both Compass Digital 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 Compass Digital and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Digital Acquisition and Hafnia Limited, you can compare the effects of market volatilities on Compass Digital 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 Compass Digital with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Digital and Hafnia.
Diversification Opportunities for Compass Digital and Hafnia
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compass and Hafnia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Compass Digital Acquisition and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Compass Digital 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 Compass Digital Acquisition 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 Compass Digital i.e., Compass Digital and Hafnia go up and down completely randomly.
Pair Corralation between Compass Digital and Hafnia
If you would invest 499.00 in Hafnia Limited on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Hafnia Limited or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Compass Digital Acquisition vs. Hafnia Limited
Performance |
| Timeline |
| Compass Digital Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Hafnia Limited |
Compass Digital and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Digital and Hafnia
The main advantage of trading using opposite Compass Digital and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Digital 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.| Compass Digital vs. Hasbro Inc | Compass Digital vs. United Parks Resorts | Compass Digital vs. SL Green Realty | Compass Digital vs. Bassett Furniture Industries |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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