Correlation Between Costamare and Hafnia
Can any of the company-specific risk be diversified away by investing in both Costamare 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 Costamare and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Hafnia Limited, you can compare the effects of market volatilities on Costamare 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 Costamare with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Hafnia.
Diversification Opportunities for Costamare and Hafnia
Very good diversification
The 3 months correlation between Costamare and Hafnia is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Costamare 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 Costamare 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 Costamare i.e., Costamare and Hafnia go up and down completely randomly.
Pair Corralation between Costamare and Hafnia
Assuming the 90 days trading horizon Costamare is expected to generate 0.26 times more return on investment than Hafnia. However, Costamare is 3.84 times less risky than Hafnia. It trades about -0.03 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.18 per unit of risk. If you would invest 2,608 in Costamare on August 31, 2024 and sell it today you would lose (35.00) from holding Costamare or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. Hafnia Limited
Performance |
| Timeline |
| Costamare |
| Hafnia Limited |
Costamare and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Hafnia
The main advantage of trading using opposite Costamare and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare 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.| Costamare vs. Safe Bulkers | Costamare vs. Safe Bulkers | Costamare vs. Diana Shipping | Costamare vs. Global Ship Lease |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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