Correlation Between Havila Shipping and Shelf Drilling
Can any of the company-specific risk be diversified away by investing in both Havila Shipping and Shelf Drilling 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 Havila Shipping and Shelf Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Havila Shipping ASA and Shelf Drilling, you can compare the effects of market volatilities on Havila Shipping and Shelf Drilling 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 Havila Shipping with a short position of Shelf Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Havila Shipping and Shelf Drilling.
Diversification Opportunities for Havila Shipping and Shelf Drilling
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Havila and Shelf is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Havila Shipping ASA and Shelf Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelf Drilling and Havila Shipping 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 Havila Shipping ASA are associated (or correlated) with Shelf Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelf Drilling has no effect on the direction of Havila Shipping i.e., Havila Shipping and Shelf Drilling go up and down completely randomly.
Pair Corralation between Havila Shipping and Shelf Drilling
Assuming the 90 days trading horizon Havila Shipping ASA is expected to generate 0.66 times more return on investment than Shelf Drilling. However, Havila Shipping ASA is 1.51 times less risky than Shelf Drilling. It trades about -0.29 of its potential returns per unit of risk. Shelf Drilling is currently generating about -0.51 per unit of risk. If you would invest 312.00 in Havila Shipping ASA on August 29, 2024 and sell it today you would lose (62.00) from holding Havila Shipping ASA or give up 19.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Havila Shipping ASA vs. Shelf Drilling
Performance |
| Timeline |
| Havila Shipping ASA |
| Shelf Drilling |
Havila Shipping and Shelf Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Havila Shipping and Shelf Drilling
The main advantage of trading using opposite Havila Shipping and Shelf Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Havila Shipping position performs unexpectedly, Shelf Drilling 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 Shelf Drilling will offset losses from the drop in Shelf Drilling's long position.| Havila Shipping vs. Solstad Offsho | Havila Shipping vs. Eidesvik Offshore ASA | Havila Shipping vs. Prosafe SE | Havila Shipping vs. BW Offshore |
| Shelf Drilling vs. BW Offshore | Shelf Drilling vs. Elkem ASA | Shelf Drilling vs. Solstad Offsho | Shelf Drilling vs. Arcticzymes Technologies ASA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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