Correlation Between Hafnia and Newell Brands
Can any of the company-specific risk be diversified away by investing in both Hafnia and Newell Brands 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 Newell Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Newell Brands, you can compare the effects of market volatilities on Hafnia and Newell Brands 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 Newell Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Newell Brands.
Diversification Opportunities for Hafnia and Newell Brands
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hafnia and Newell is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Newell Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 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 Newell Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands has no effect on the direction of Hafnia i.e., Hafnia and Newell Brands go up and down completely randomly.
Pair Corralation between Hafnia and Newell Brands
Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the Newell Brands. But the stock apears to be less risky and, when comparing its historical volatility, Hafnia Limited is 1.99 times less risky than Newell Brands. The stock trades about -0.06 of its potential returns per unit of risk. The Newell Brands is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 619.00 in Newell Brands on October 22, 2024 and sell it today you would earn a total of 393.00 from holding Newell Brands or generate 63.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hafnia Limited vs. Newell Brands
Performance |
| Timeline |
| Hafnia Limited |
| Newell Brands |
Hafnia and Newell Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Newell Brands
The main advantage of trading using opposite Hafnia and Newell Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Newell Brands 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 Newell Brands will offset losses from the drop in Newell Brands' long position.| Hafnia vs. Summit Bank Group | Hafnia vs. National CineMedia | Hafnia vs. Cheche Group Class | Hafnia vs. Integral Ad Science |
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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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