Correlation Between USA Compression and Hafnia
Can any of the company-specific risk be diversified away by investing in both USA Compression 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 USA Compression and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USA Compression Partners and Hafnia Limited, you can compare the effects of market volatilities on USA Compression 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 USA Compression with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of USA Compression and Hafnia.
Diversification Opportunities for USA Compression and Hafnia
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USA and Hafnia is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding USA Compression Partners and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and USA Compression 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 USA Compression Partners 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 USA Compression i.e., USA Compression and Hafnia go up and down completely randomly.
Pair Corralation between USA Compression and Hafnia
Given the investment horizon of 90 days USA Compression Partners is expected to generate 0.56 times more return on investment than Hafnia. However, USA Compression Partners is 1.77 times less risky than Hafnia. It trades about 0.31 of its potential returns per unit of risk. Hafnia Limited is currently generating about 0.04 per unit of risk. If you would invest 2,167 in USA Compression Partners on September 5, 2024 and sell it today you would earn a total of 227.00 from holding USA Compression Partners or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USA Compression Partners vs. Hafnia Limited
Performance |
| Timeline |
| USA Compression Partners |
| Hafnia Limited |
USA Compression and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USA Compression and Hafnia
The main advantage of trading using opposite USA Compression and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USA Compression 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.| USA Compression vs. Now Inc | USA Compression vs. Oil States International | USA Compression vs. Oceaneering International | USA Compression vs. Geospace Technologies |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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