Correlation Between Hafnia and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Hafnia and BW Offshore 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 BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and BW Offshore Limited, you can compare the effects of market volatilities on Hafnia and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and BW Offshore.
Diversification Opportunities for Hafnia and BW Offshore
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hafnia and BWOFY is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and BW Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore Limited 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore Limited has no effect on the direction of Hafnia i.e., Hafnia and BW Offshore go up and down completely randomly.
Pair Corralation between Hafnia and BW Offshore
Given the investment horizon of 90 days Hafnia is expected to generate 1.18 times less return on investment than BW Offshore. In addition to that, Hafnia is 3.6 times more volatile than BW Offshore Limited. It trades about 0.05 of its total potential returns per unit of risk. BW Offshore Limited is currently generating about 0.2 per unit of volatility. If you would invest 538.00 in BW Offshore Limited on September 5, 2024 and sell it today you would earn a total of 17.00 from holding BW Offshore Limited or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hafnia Limited vs. BW Offshore Limited
Performance |
| Timeline |
| Hafnia Limited |
| BW Offshore Limited |
Hafnia and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and BW Offshore
The main advantage of trading using opposite Hafnia and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Hafnia vs. USA Compression Partners | Hafnia vs. Dynagas LNG Partners | Hafnia vs. Crossamerica Partners LP | Hafnia vs. Delek Logistics Partners |
| BW Offshore vs. Siriuspoint | BW Offshore vs. NI Holdings | BW Offshore vs. Citizens | BW Offshore vs. Palomar Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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