Correlation Between Prosafe SE and Havila Shipping
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and Havila Shipping 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 Prosafe SE and Havila Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and Havila Shipping ASA, you can compare the effects of market volatilities on Prosafe SE and Havila Shipping 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 Prosafe SE with a short position of Havila Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and Havila Shipping.
Diversification Opportunities for Prosafe SE and Havila Shipping
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prosafe and Havila is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and Havila Shipping ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havila Shipping ASA and Prosafe SE 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 Prosafe SE are associated (or correlated) with Havila Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havila Shipping ASA has no effect on the direction of Prosafe SE i.e., Prosafe SE and Havila Shipping go up and down completely randomly.
Pair Corralation between Prosafe SE and Havila Shipping
Assuming the 90 days trading horizon Prosafe SE is expected to under-perform the Havila Shipping. In addition to that, Prosafe SE is 2.37 times more volatile than Havila Shipping ASA. It trades about -0.61 of its total potential returns per unit of risk. Havila Shipping ASA is currently generating about -0.15 per unit of volatility. If you would invest 291.00 in Havila Shipping ASA on September 1, 2024 and sell it today you would lose (33.00) from holding Havila Shipping ASA or give up 11.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Prosafe SE vs. Havila Shipping ASA
Performance |
| Timeline |
| Prosafe SE |
| Havila Shipping ASA |
Prosafe SE and Havila Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and Havila Shipping
The main advantage of trading using opposite Prosafe SE and Havila Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, Havila Shipping 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 Havila Shipping will offset losses from the drop in Havila Shipping's long position.| Prosafe SE vs. Aker ASA | Prosafe SE vs. Subsea 7 SA | Prosafe SE vs. TGS NOPEC Geophysical | Prosafe SE vs. BW Offshore |
| Havila Shipping vs. Solstad Offsho | Havila Shipping vs. Eidesvik Offshore ASA | Havila Shipping vs. Prosafe SE | Havila Shipping vs. BW Offshore |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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