Correlation Between Hafnia and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Hafnia and KVH Industries 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 KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and KVH Industries, you can compare the effects of market volatilities on Hafnia and KVH Industries 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 KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and KVH Industries.
Diversification Opportunities for Hafnia and KVH Industries
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hafnia and KVH is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries 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 KVH Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KVH Industries has no effect on the direction of Hafnia i.e., Hafnia and KVH Industries go up and down completely randomly.
Pair Corralation between Hafnia and KVH Industries
Given the investment horizon of 90 days Hafnia Limited is expected to generate 0.8 times more return on investment than KVH Industries. However, Hafnia Limited is 1.25 times less risky than KVH Industries. It trades about 0.05 of its potential returns per unit of risk. KVH Industries is currently generating about -0.03 per unit of risk. If you would invest 408.00 in Hafnia Limited on September 1, 2024 and sell it today you would earn a total of 156.00 from holding Hafnia Limited or generate 38.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.4% |
| Values | Daily Returns |
Hafnia Limited vs. KVH Industries
Performance |
| Timeline |
| Hafnia Limited |
| KVH Industries |
Hafnia and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and KVH Industries
The main advantage of trading using opposite Hafnia and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, KVH Industries 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 KVH Industries will offset losses from the drop in KVH Industries' long position.| Hafnia vs. Fidus Investment Corp | Hafnia vs. BTB Real Estate | Hafnia vs. JBG SMITH Properties | Hafnia vs. Aegon NV ADR |
| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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