Correlation Between Hafnia and Tata Motors
Can any of the company-specific risk be diversified away by investing in both Hafnia and Tata Motors 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 Tata Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Tata Motors Limited, you can compare the effects of market volatilities on Hafnia and Tata Motors 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 Tata Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Tata Motors.
Diversification Opportunities for Hafnia and Tata Motors
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hafnia and Tata is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Tata Motors Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tata Motors 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 Tata Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tata Motors Limited has no effect on the direction of Hafnia i.e., Hafnia and Tata Motors go up and down completely randomly.
Pair Corralation between Hafnia and Tata Motors
If you would invest 545.00 in Hafnia Limited on September 14, 2024 and sell it today you would lose (3.00) from holding Hafnia Limited or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.37% |
| Values | Daily Returns |
Hafnia Limited vs. Tata Motors Limited
Performance |
| Timeline |
| Hafnia Limited |
| Tata Motors Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hafnia and Tata Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Tata Motors
The main advantage of trading using opposite Hafnia and Tata Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Tata Motors 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 Tata Motors will offset losses from the drop in Tata Motors' long position.| Hafnia vs. Asure Software | Hafnia vs. Analog Devices | Hafnia vs. Tower Semiconductor | Hafnia vs. IPG Photonics |
| Tata Motors vs. Hafnia Limited | Tata Motors vs. Lindblad Expeditions Holdings | Tata Motors vs. Warner Music Group | Tata Motors vs. Sun Country Airlines |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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