Correlation Between Hafnia and Lincoln Educational
Can any of the company-specific risk be diversified away by investing in both Hafnia and Lincoln Educational 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 Lincoln Educational into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Lincoln Educational Services, you can compare the effects of market volatilities on Hafnia and Lincoln Educational 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 Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Lincoln Educational.
Diversification Opportunities for Hafnia and Lincoln Educational
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hafnia and Lincoln is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational 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 Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of Hafnia i.e., Hafnia and Lincoln Educational go up and down completely randomly.
Pair Corralation between Hafnia and Lincoln Educational
Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the Lincoln Educational. But the stock apears to be less risky and, when comparing its historical volatility, Hafnia Limited is 1.19 times less risky than Lincoln Educational. The stock trades about -0.01 of its potential returns per unit of risk. The Lincoln Educational Services is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,004 in Lincoln Educational Services on August 25, 2024 and sell it today you would earn a total of 611.00 from holding Lincoln Educational Services or generate 60.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.56% |
| Values | Daily Returns |
Hafnia Limited vs. Lincoln Educational Services
Performance |
| Timeline |
| Hafnia Limited |
| Lincoln Educational |
Hafnia and Lincoln Educational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Lincoln Educational
The main advantage of trading using opposite Hafnia and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Lincoln Educational 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 Lincoln Educational will offset losses from the drop in Lincoln Educational's long position.| Hafnia vs. Brandywine Realty Trust | Hafnia vs. LB Foster | Hafnia vs. Kite Realty Group | Hafnia vs. China Tontine Wines |
| Lincoln Educational vs. Vasta Platform | Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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