Correlation Between Hafnia and Powell Max
Can any of the company-specific risk be diversified away by investing in both Hafnia and Powell Max 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 Powell Max into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Powell Max Limited, you can compare the effects of market volatilities on Hafnia and Powell Max 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 Powell Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Powell Max.
Diversification Opportunities for Hafnia and Powell Max
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hafnia and Powell is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Powell Max Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powell Max Limited 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 Powell Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powell Max Limited has no effect on the direction of Hafnia i.e., Hafnia and Powell Max go up and down completely randomly.
Pair Corralation between Hafnia and Powell Max
Given the investment horizon of 90 days Hafnia Limited is expected to generate 0.49 times more return on investment than Powell Max. However, Hafnia Limited is 2.04 times less risky than Powell Max. It trades about 0.04 of its potential returns per unit of risk. Powell Max Limited is currently generating about -0.04 per unit of risk. If you would invest 411.00 in Hafnia Limited on September 3, 2024 and sell it today you would earn a total of 158.00 from holding Hafnia Limited or generate 38.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 15.66% |
| Values | Daily Returns |
Hafnia Limited vs. Powell Max Limited
Performance |
| Timeline |
| Hafnia Limited |
| Powell Max Limited |
Hafnia and Powell Max Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Powell Max
The main advantage of trading using opposite Hafnia and Powell Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Powell Max 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 Powell Max will offset losses from the drop in Powell Max's long position.| Hafnia vs. Triton International Limited | Hafnia vs. Avis Budget Group | Hafnia vs. Videolocity International | Hafnia vs. Xponential Fitness |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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