Correlation Between Hafnia and SOUTHERN

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

Diversification Opportunities for Hafnia and SOUTHERN

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Hafnia and SOUTHERN is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of Hafnia i.e., Hafnia and SOUTHERN go up and down completely randomly.

Pair Corralation between Hafnia and SOUTHERN

Given the investment horizon of 90 days Hafnia is expected to generate 16.09 times less return on investment than SOUTHERN. But when comparing it to its historical volatility, Hafnia Limited is 16.62 times less risky than SOUTHERN. It trades about 0.04 of its potential returns per unit of risk. SOUTHERN PER CORP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  10,555  in SOUTHERN PER CORP on September 3, 2024 and sell it today you would lose (1,352) from holding SOUTHERN PER CORP or give up 12.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy87.22%
ValuesDaily Returns

Hafnia Limited  vs.  SOUTHERN PER CORP

 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 unsteady 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.
SOUTHERN PER P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SOUTHERN PER CORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SOUTHERN PER CORP investors.

Hafnia and SOUTHERN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hafnia and SOUTHERN

The main advantage of trading using opposite Hafnia and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.
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The idea behind Hafnia Limited and SOUTHERN PER CORP 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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