Correlation Between Western Acquisition and Hafnia
Can any of the company-specific risk be diversified away by investing in both Western Acquisition 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 Western Acquisition and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Hafnia Limited, you can compare the effects of market volatilities on Western Acquisition 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 Western Acquisition with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Hafnia.
Diversification Opportunities for Western Acquisition and Hafnia
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Hafnia is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Western Acquisition 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 Western Acquisition Ventures 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 Western Acquisition i.e., Western Acquisition and Hafnia go up and down completely randomly.
Pair Corralation between Western Acquisition and Hafnia
Given the investment horizon of 90 days Western Acquisition Ventures is expected to under-perform the Hafnia. But the stock apears to be less risky and, when comparing its historical volatility, Western Acquisition Ventures is 1.68 times less risky than Hafnia. The stock trades about -0.13 of its potential returns per unit of risk. The Hafnia Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 569.00 in Hafnia Limited on September 4, 2024 and sell it today you would lose (6.00) from holding Hafnia Limited or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Hafnia Limited
Performance |
| Timeline |
| Western Acquisition |
| Hafnia Limited |
Western Acquisition and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Hafnia
The main advantage of trading using opposite Western Acquisition and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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.The idea behind Western Acquisition Ventures and Hafnia Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hafnia vs. Axalta Coating Systems | Hafnia vs. NL Industries | Hafnia vs. Chemours Co | Hafnia vs. CVR Partners LP |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |