Correlation Between Havila Shipping and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both Havila Shipping and Tomra Systems 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 Tomra Systems 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 Tomra Systems ASA, you can compare the effects of market volatilities on Havila Shipping and Tomra Systems 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 Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Havila Shipping and Tomra Systems.
Diversification Opportunities for Havila Shipping and Tomra Systems
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Havila and Tomra is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Havila Shipping ASA and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA 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 Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of Havila Shipping i.e., Havila Shipping and Tomra Systems go up and down completely randomly.
Pair Corralation between Havila Shipping and Tomra Systems
Assuming the 90 days trading horizon Havila Shipping ASA is expected to under-perform the Tomra Systems. But the stock apears to be less risky and, when comparing its historical volatility, Havila Shipping ASA is 1.0 times less risky than Tomra Systems. The stock trades about -0.29 of its potential returns per unit of risk. The Tomra Systems ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 16,140 in Tomra Systems ASA on August 28, 2024 and sell it today you would lose (90.00) from holding Tomra Systems ASA or give up 0.56% 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. Tomra Systems ASA
Performance |
| Timeline |
| Havila Shipping ASA |
| Tomra Systems ASA |
Havila Shipping and Tomra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Havila Shipping and Tomra Systems
The main advantage of trading using opposite Havila Shipping and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Havila Shipping position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.The idea behind Havila Shipping ASA and Tomra Systems ASA 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.| Tomra Systems vs. Eidesvik Offshore ASA | Tomra Systems vs. Kitron ASA | Tomra Systems vs. Havila Shipping ASA | Tomra Systems vs. Elkem 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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