Correlation Between Hafnia and ESH Acquisition
Can any of the company-specific risk be diversified away by investing in both Hafnia and ESH Acquisition 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 ESH Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and ESH Acquisition Corp, you can compare the effects of market volatilities on Hafnia and ESH Acquisition 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 ESH Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and ESH Acquisition.
Diversification Opportunities for Hafnia and ESH Acquisition
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hafnia and ESH is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and ESH Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESH Acquisition Corp 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 ESH Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESH Acquisition Corp has no effect on the direction of Hafnia i.e., Hafnia and ESH Acquisition go up and down completely randomly.
Pair Corralation between Hafnia and ESH Acquisition
Given the investment horizon of 90 days Hafnia Limited is expected to generate 7.24 times more return on investment than ESH Acquisition. However, Hafnia is 7.24 times more volatile than ESH Acquisition Corp. It trades about 0.24 of its potential returns per unit of risk. ESH Acquisition Corp is currently generating about 0.16 per unit of risk. If you would invest 483.00 in Hafnia Limited on September 13, 2024 and sell it today you would earn a total of 61.00 from holding Hafnia Limited or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hafnia Limited vs. ESH Acquisition Corp
Performance |
| Timeline |
| Hafnia Limited |
| ESH Acquisition Corp |
Hafnia and ESH Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and ESH Acquisition
The main advantage of trading using opposite Hafnia and ESH Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, ESH Acquisition 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 ESH Acquisition will offset losses from the drop in ESH Acquisition's long position.| Hafnia vs. Vestis | Hafnia vs. Artisan Partners Asset | Hafnia vs. Global Ship Lease | Hafnia vs. Freedom Bank of |
| ESH Acquisition vs. HE Equipment Services | ESH Acquisition vs. AmTrust Financial Services | ESH Acquisition vs. Barings BDC | ESH Acquisition vs. Univest Pennsylvania |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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