Correlation Between Hafnia and Himalaya Shipping
Can any of the company-specific risk be diversified away by investing in both Hafnia and Himalaya Shipping 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 Himalaya Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Himalaya Shipping, you can compare the effects of market volatilities on Hafnia and Himalaya Shipping 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 Himalaya Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Himalaya Shipping.
Diversification Opportunities for Hafnia and Himalaya Shipping
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hafnia and Himalaya is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Himalaya Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Himalaya Shipping 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 Himalaya Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Himalaya Shipping has no effect on the direction of Hafnia i.e., Hafnia and Himalaya Shipping go up and down completely randomly.
Pair Corralation between Hafnia and Himalaya Shipping
Given the investment horizon of 90 days Hafnia Limited is expected to generate 0.84 times more return on investment than Himalaya Shipping. However, Hafnia Limited is 1.19 times less risky than Himalaya Shipping. It trades about 0.06 of its potential returns per unit of risk. Himalaya Shipping is currently generating about 0.03 per unit of risk. If you would invest 377.00 in Hafnia Limited on August 31, 2024 and sell it today you would earn a total of 187.00 from holding Hafnia Limited or generate 49.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.36% |
| Values | Daily Returns |
Hafnia Limited vs. Himalaya Shipping
Performance |
| Timeline |
| Hafnia Limited |
| Himalaya Shipping |
Hafnia and Himalaya Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Himalaya Shipping
The main advantage of trading using opposite Hafnia and Himalaya Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Himalaya Shipping 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 Himalaya Shipping will offset losses from the drop in Himalaya Shipping's long position.| Hafnia vs. Comstock Holding Companies | Hafnia vs. SEI Investments | Hafnia vs. Chester Mining | Hafnia vs. Link Real Estate |
| Himalaya Shipping vs. Oceanpal | Himalaya Shipping vs. Safe Bulkers | Himalaya Shipping vs. Safe Bulkers | Himalaya Shipping vs. Diana Shipping |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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