Correlation Between Hafnia and SITC International
Can any of the company-specific risk be diversified away by investing in both Hafnia and SITC International 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 SITC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and SITC International Holdings, you can compare the effects of market volatilities on Hafnia and SITC International 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 SITC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and SITC International.
Diversification Opportunities for Hafnia and SITC International
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hafnia and SITC is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and SITC International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITC International 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 SITC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITC International has no effect on the direction of Hafnia i.e., Hafnia and SITC International go up and down completely randomly.
Pair Corralation between Hafnia and SITC International
Assuming the 90 days horizon Hafnia Limited is expected to under-perform the SITC International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hafnia Limited is 6.77 times less risky than SITC International. The pink sheet trades about -0.55 of its potential returns per unit of risk. The SITC International Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 163.00 in SITC International Holdings on September 3, 2024 and sell it today you would earn a total of 75.00 from holding SITC International Holdings or generate 46.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.0% |
| Values | Daily Returns |
Hafnia Limited vs. SITC International Holdings
Performance |
| Timeline |
| Hafnia Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SITC International |
Hafnia and SITC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and SITC International
The main advantage of trading using opposite Hafnia and SITC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, SITC International 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 SITC International will offset losses from the drop in SITC International's long position.The idea behind Hafnia Limited and SITC International Holdings 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.| SITC International vs. COSCO SHIPPING Development | SITC International vs. COSCO SHIPPING Holdings | SITC International vs. Nippon Yusen Kabushiki | SITC International vs. Western Bulk Chartering |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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