Correlation Between Hafnia and Vestis
Can any of the company-specific risk be diversified away by investing in both Hafnia and Vestis 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 Vestis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Vestis, you can compare the effects of market volatilities on Hafnia and Vestis 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 Vestis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Vestis.
Diversification Opportunities for Hafnia and Vestis
Significant diversification
The 3 months correlation between Hafnia and Vestis is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Hafnia i.e., Hafnia and Vestis go up and down completely randomly.
Pair Corralation between Hafnia and Vestis
Given the investment horizon of 90 days Hafnia is expected to generate 1.69 times less return on investment than Vestis. But when comparing it to its historical volatility, Hafnia Limited is 1.56 times less risky than Vestis. It trades about 0.16 of its potential returns per unit of risk. Vestis is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,435 in Vestis on September 14, 2024 and sell it today you would earn a total of 203.00 from holding Vestis or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hafnia Limited vs. Vestis
Performance |
| Timeline |
| Hafnia Limited |
| Vestis |
Hafnia and Vestis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Vestis
The main advantage of trading using opposite Hafnia and Vestis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Vestis 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 Vestis will offset losses from the drop in Vestis' long position.| Hafnia vs. Asure Software | Hafnia vs. Analog Devices | Hafnia vs. Tower Semiconductor | Hafnia vs. IPG Photonics |
| Vestis vs. McGrath RentCorp | Vestis vs. Custom Truck One | Vestis vs. Herc Holdings | Vestis vs. Alta Equipment Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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