Correlation Between Stolt Nielsen and Hoegh Autoliners
Can any of the company-specific risk be diversified away by investing in both Stolt Nielsen and Hoegh Autoliners 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 Stolt Nielsen and Hoegh Autoliners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stolt Nielsen Limited and Hoegh Autoliners ASA, you can compare the effects of market volatilities on Stolt Nielsen and Hoegh Autoliners 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 Stolt Nielsen with a short position of Hoegh Autoliners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stolt Nielsen and Hoegh Autoliners.
Diversification Opportunities for Stolt Nielsen and Hoegh Autoliners
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stolt and Hoegh is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited and Hoegh Autoliners ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoegh Autoliners ASA and Stolt Nielsen 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 Stolt Nielsen Limited are associated (or correlated) with Hoegh Autoliners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoegh Autoliners ASA has no effect on the direction of Stolt Nielsen i.e., Stolt Nielsen and Hoegh Autoliners go up and down completely randomly.
Pair Corralation between Stolt Nielsen and Hoegh Autoliners
Assuming the 90 days trading horizon Stolt Nielsen Limited is expected to under-perform the Hoegh Autoliners. But the stock apears to be less risky and, when comparing its historical volatility, Stolt Nielsen Limited is 1.51 times less risky than Hoegh Autoliners. The stock trades about -0.01 of its potential returns per unit of risk. The Hoegh Autoliners ASA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,761 in Hoegh Autoliners ASA on September 4, 2024 and sell it today you would earn a total of 6,849 from holding Hoegh Autoliners ASA or generate 118.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stolt Nielsen Limited vs. Hoegh Autoliners ASA
Performance |
| Timeline |
| Stolt Nielsen Limited |
| Hoegh Autoliners ASA |
Stolt Nielsen and Hoegh Autoliners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stolt Nielsen and Hoegh Autoliners
The main advantage of trading using opposite Stolt Nielsen and Hoegh Autoliners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen position performs unexpectedly, Hoegh Autoliners 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 Hoegh Autoliners will offset losses from the drop in Hoegh Autoliners' long position.| Stolt Nielsen vs. Sparebank 1 SMN | Stolt Nielsen vs. BW Offshore | Stolt Nielsen vs. Norwegian Air Shuttle | Stolt Nielsen vs. Jaeren Sparebank |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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