Correlation Between Hafnia and BRISTOL

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Can any of the company-specific risk be diversified away by investing in both Hafnia and BRISTOL 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 BRISTOL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and BRISTOL MYERS SQUIBB CO, you can compare the effects of market volatilities on Hafnia and BRISTOL 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 BRISTOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and BRISTOL.

Diversification Opportunities for Hafnia and BRISTOL

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hafnia and BRISTOL is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and BRISTOL MYERS SQUIBB CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRISTOL MYERS SQUIBB 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 BRISTOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRISTOL MYERS SQUIBB has no effect on the direction of Hafnia i.e., Hafnia and BRISTOL go up and down completely randomly.

Pair Corralation between Hafnia and BRISTOL

Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the BRISTOL. In addition to that, Hafnia is 6.02 times more volatile than BRISTOL MYERS SQUIBB CO. It trades about -0.14 of its total potential returns per unit of risk. BRISTOL MYERS SQUIBB CO is currently generating about -0.01 per unit of volatility. If you would invest  9,938  in BRISTOL MYERS SQUIBB CO on September 12, 2024 and sell it today you would lose (13.00) from holding BRISTOL MYERS SQUIBB CO or give up 0.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy48.44%
ValuesDaily Returns

Hafnia Limited  vs.  BRISTOL MYERS SQUIBB CO

 Performance 
       Timeline  
Hafnia Limited 

Risk-Adjusted Performance

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Weak
 
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Very Weak
Over the last 90 days Hafnia Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
BRISTOL MYERS SQUIBB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BRISTOL MYERS SQUIBB CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BRISTOL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Hafnia and BRISTOL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hafnia and BRISTOL

The main advantage of trading using opposite Hafnia and BRISTOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, BRISTOL 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 BRISTOL will offset losses from the drop in BRISTOL's long position.
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The idea behind Hafnia Limited and BRISTOL MYERS SQUIBB CO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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