Correlation Between Diana Shipping and Hafnia
Can any of the company-specific risk be diversified away by investing in both Diana Shipping 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 Diana Shipping and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diana Shipping and Hafnia Limited, you can compare the effects of market volatilities on Diana Shipping 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 Diana Shipping with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diana Shipping and Hafnia.
Diversification Opportunities for Diana Shipping and Hafnia
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diana and Hafnia is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Diana Shipping and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Diana Shipping 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 Diana Shipping 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 Diana Shipping i.e., Diana Shipping and Hafnia go up and down completely randomly.
Pair Corralation between Diana Shipping and Hafnia
Considering the 90-day investment horizon Diana Shipping is expected to under-perform the Hafnia. In addition to that, Diana Shipping is 1.14 times more volatile than Hafnia Limited. It trades about -0.2 of its total potential returns per unit of risk. Hafnia Limited is currently generating about -0.2 per unit of volatility. If you would invest 770.00 in Hafnia Limited on August 30, 2024 and sell it today you would lose (206.00) from holding Hafnia Limited or give up 26.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diana Shipping vs. Hafnia Limited
Performance |
| Timeline |
| Diana Shipping |
| Hafnia Limited |
Diana Shipping and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diana Shipping and Hafnia
The main advantage of trading using opposite Diana Shipping and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diana Shipping 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.| Diana Shipping vs. Star Bulk Carriers | Diana Shipping vs. Golden Ocean Group | Diana Shipping vs. Global Ship Lease | Diana Shipping vs. Genco Shipping Trading |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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