Correlation Between Hudson Pacific and Hafnia
Can any of the company-specific risk be diversified away by investing in both Hudson Pacific and Hafnia 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 Hudson Pacific and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Pacific Properties and Hafnia Limited, you can compare the effects of market volatilities on Hudson Pacific and Hafnia 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 Hudson Pacific with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Pacific and Hafnia.
Diversification Opportunities for Hudson Pacific and Hafnia
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hudson and Hafnia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Hudson Pacific 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 Hudson Pacific Properties are associated (or correlated) with Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Hudson Pacific i.e., Hudson Pacific and Hafnia go up and down completely randomly.
Pair Corralation between Hudson Pacific and Hafnia
Considering the 90-day investment horizon Hudson Pacific Properties is expected to under-perform the Hafnia. In addition to that, Hudson Pacific is 1.41 times more volatile than Hafnia Limited. It trades about -0.03 of its total potential returns per unit of risk. Hafnia Limited is currently generating about 0.04 per unit of volatility. If you would invest 411.00 in Hafnia Limited on September 5, 2024 and sell it today you would earn a total of 170.00 from holding Hafnia Limited or generate 41.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.4% |
| Values | Daily Returns |
Hudson Pacific Properties vs. Hafnia Limited
Performance |
| Timeline |
| Hudson Pacific Properties |
| Hafnia Limited |
Hudson Pacific and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Pacific and Hafnia
The main advantage of trading using opposite Hudson Pacific and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Pacific position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's long position.| Hudson Pacific vs. Boston Properties | Hudson Pacific vs. Douglas Emmett | Hudson Pacific vs. Vornado Realty Trust |
| Hafnia vs. USA Compression Partners | Hafnia vs. Dynagas LNG Partners | Hafnia vs. Crossamerica Partners LP | Hafnia vs. Delek Logistics Partners |
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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