Correlation Between Western Bulk and Havila Shipping
Can any of the company-specific risk be diversified away by investing in both Western Bulk 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 Western Bulk and Havila Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Bulk Chartering and Havila Shipping ASA, you can compare the effects of market volatilities on Western Bulk 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 Western Bulk with a short position of Havila Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Bulk and Havila Shipping.
Diversification Opportunities for Western Bulk and Havila Shipping
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Havila is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Western Bulk Chartering 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 Western Bulk 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 Bulk Chartering 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 Western Bulk i.e., Western Bulk and Havila Shipping go up and down completely randomly.
Pair Corralation between Western Bulk and Havila Shipping
Assuming the 90 days trading horizon Western Bulk Chartering is expected to under-perform the Havila Shipping. But the stock apears to be less risky and, when comparing its historical volatility, Western Bulk Chartering is 2.25 times less risky than Havila Shipping. The stock trades about -0.07 of its potential returns per unit of risk. The Havila Shipping ASA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 567.00 in Havila Shipping ASA on September 2, 2024 and sell it today you would lose (309.00) from holding Havila Shipping ASA or give up 54.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Bulk Chartering vs. Havila Shipping ASA
Performance |
| Timeline |
| Western Bulk Chartering |
| Havila Shipping ASA |
Western Bulk and Havila Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Bulk and Havila Shipping
The main advantage of trading using opposite Western Bulk and Havila Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Bulk 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.| Western Bulk vs. Havila Shipping ASA | Western Bulk vs. Shelf Drilling | Western Bulk vs. Solstad Offsho | Western Bulk vs. Eidesvik Offshore ASA |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |