Correlation Between CVR Partners and Hafnia
Can any of the company-specific risk be diversified away by investing in both CVR Partners 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 CVR Partners and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Partners LP and Hafnia Limited, you can compare the effects of market volatilities on CVR Partners 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 CVR Partners with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Partners and Hafnia.
Diversification Opportunities for CVR Partners and Hafnia
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVR and Hafnia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CVR Partners LP and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and CVR Partners 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 CVR Partners LP 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 CVR Partners i.e., CVR Partners and Hafnia go up and down completely randomly.
Pair Corralation between CVR Partners and Hafnia
Considering the 90-day investment horizon CVR Partners is expected to generate 1.19 times less return on investment than Hafnia. But when comparing it to its historical volatility, CVR Partners LP is 1.0 times less risky than Hafnia. It trades about 0.15 of its potential returns per unit of risk. Hafnia Limited is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Hafnia Limited on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Hafnia Limited or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Partners LP vs. Hafnia Limited
Performance |
| Timeline |
| CVR Partners LP |
| Hafnia Limited |
CVR Partners and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Partners and Hafnia
The main advantage of trading using opposite CVR Partners and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Partners 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.| CVR Partners vs. Nutrien | CVR Partners vs. Intrepid Potash | CVR Partners vs. Corteva | CVR Partners vs. CF Industries Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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