Correlation Between Hafnia and Ambev SA
Can any of the company-specific risk be diversified away by investing in both Hafnia and Ambev SA 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 Hafnia and Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Ambev SA ADR, you can compare the effects of market volatilities on Hafnia and Ambev SA 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 Hafnia with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Ambev SA.
Diversification Opportunities for Hafnia and Ambev SA
Very good diversification
The 3 months correlation between Hafnia and Ambev is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Ambev SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA ADR and Hafnia 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 Hafnia Limited are associated (or correlated) with Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA ADR has no effect on the direction of Hafnia i.e., Hafnia and Ambev SA go up and down completely randomly.
Pair Corralation between Hafnia and Ambev SA
Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the Ambev SA. In addition to that, Hafnia is 1.17 times more volatile than Ambev SA ADR. It trades about -0.09 of its total potential returns per unit of risk. Ambev SA ADR is currently generating about 0.27 per unit of volatility. If you would invest 183.00 in Ambev SA ADR on November 28, 2024 and sell it today you would earn a total of 16.00 from holding Ambev SA ADR or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hafnia Limited vs. Ambev SA ADR
Performance |
| Timeline |
| Hafnia Limited |
| Ambev SA ADR |
Hafnia and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Ambev SA
The main advantage of trading using opposite Hafnia and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Ambev SA 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 Ambev SA will offset losses from the drop in Ambev SA's long position.| Hafnia vs. Jabil Circuit | Hafnia vs. Maanshan Iron Steel | Hafnia vs. Allegheny Technologies Incorporated | Hafnia vs. Enzyme Environmental Solutions |
| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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