Correlation Between Hafnia and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both Hafnia and Western Acquisition 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 Western Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and Western Acquisition Ventures, you can compare the effects of market volatilities on Hafnia and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and Western Acquisition.
Diversification Opportunities for Hafnia and Western Acquisition
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hafnia and Western is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Hafnia i.e., Hafnia and Western Acquisition go up and down completely randomly.
Pair Corralation between Hafnia and Western Acquisition
Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the Western Acquisition. In addition to that, Hafnia is 1.23 times more volatile than Western Acquisition Ventures. It trades about -0.06 of its total potential returns per unit of risk. Western Acquisition Ventures is currently generating about 0.02 per unit of volatility. If you would invest 1,070 in Western Acquisition Ventures on September 4, 2024 and sell it today you would earn a total of 22.00 from holding Western Acquisition Ventures or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Hafnia Limited vs. Western Acquisition Ventures
Performance |
| Timeline |
| Hafnia Limited |
| Western Acquisition |
Hafnia and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and Western Acquisition
The main advantage of trading using opposite Hafnia and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition's long position.| Hafnia vs. Axalta Coating Systems | Hafnia vs. NL Industries | Hafnia vs. Chemours Co | Hafnia vs. CVR Partners LP |
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 CEOs Directory module to screen CEOs from public companies around the world.
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