Correlation Between Hafnia and HyreCar
Can any of the company-specific risk be diversified away by investing in both Hafnia and HyreCar 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 HyreCar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and HyreCar, you can compare the effects of market volatilities on Hafnia and HyreCar 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 HyreCar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and HyreCar.
Diversification Opportunities for Hafnia and HyreCar
Almost no diversification
The 3 months correlation between Hafnia and HyreCar is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and HyreCar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HyreCar 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 HyreCar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HyreCar has no effect on the direction of Hafnia i.e., Hafnia and HyreCar go up and down completely randomly.
Pair Corralation between Hafnia and HyreCar
Given the investment horizon of 90 days Hafnia is expected to generate 17.58 times less return on investment than HyreCar. But when comparing it to its historical volatility, Hafnia Limited is 23.68 times less risky than HyreCar. It trades about 0.05 of its potential returns per unit of risk. HyreCar is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.79 in HyreCar on September 12, 2024 and sell it today you would lose (1.79) from holding HyreCar or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 93.73% |
| Values | Daily Returns |
Hafnia Limited vs. HyreCar
Performance |
| Timeline |
| Hafnia Limited |
| HyreCar |
Hafnia and HyreCar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and HyreCar
The main advantage of trading using opposite Hafnia and HyreCar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, HyreCar 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 HyreCar will offset losses from the drop in HyreCar's long position.The idea behind Hafnia Limited and HyreCar pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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