Correlation Between Hafnia and MI Homes
Can any of the company-specific risk be diversified away by investing in both Hafnia and MI Homes 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 MI Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and MI Homes, you can compare the effects of market volatilities on Hafnia and MI Homes 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 MI Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and MI Homes.
Diversification Opportunities for Hafnia and MI Homes
Weak diversification
The 3 months correlation between Hafnia and MHO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Homes 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 MI Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Homes has no effect on the direction of Hafnia i.e., Hafnia and MI Homes go up and down completely randomly.
Pair Corralation between Hafnia and MI Homes
Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the MI Homes. In addition to that, Hafnia is 1.11 times more volatile than MI Homes. It trades about -0.05 of its total potential returns per unit of risk. MI Homes is currently generating about 0.15 per unit of volatility. If you would invest 15,300 in MI Homes on August 31, 2024 and sell it today you would earn a total of 1,154 from holding MI Homes or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hafnia Limited vs. MI Homes
Performance |
| Timeline |
| Hafnia Limited |
| MI Homes |
Hafnia and MI Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and MI Homes
The main advantage of trading using opposite Hafnia and MI Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, MI Homes 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 MI Homes will offset losses from the drop in MI Homes' long position.| Hafnia vs. Comstock Holding Companies | Hafnia vs. SEI Investments | Hafnia vs. Chester Mining | Hafnia vs. Link Real Estate |
| MI Homes vs. Century Communities | MI Homes vs. Dream Finders Homes | MI Homes vs. DR Horton | MI Homes vs. Everus Construction Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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