Correlation Between XXL ASA and Havila Shipping
Can any of the company-specific risk be diversified away by investing in both XXL ASA 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 XXL ASA and Havila Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XXL ASA and Havila Shipping ASA, you can compare the effects of market volatilities on XXL ASA 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 XXL ASA with a short position of Havila Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of XXL ASA and Havila Shipping.
Diversification Opportunities for XXL ASA and Havila Shipping
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XXL and Havila is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding XXL ASA 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 XXL ASA 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 XXL ASA 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 XXL ASA i.e., XXL ASA and Havila Shipping go up and down completely randomly.
Pair Corralation between XXL ASA and Havila Shipping
Assuming the 90 days trading horizon XXL ASA is expected to generate 1.41 times more return on investment than Havila Shipping. However, XXL ASA is 1.41 times more volatile than Havila Shipping ASA. It trades about -0.01 of its potential returns per unit of risk. Havila Shipping ASA is currently generating about -0.07 per unit of risk. If you would invest 6,399 in XXL ASA on January 16, 2025 and sell it today you would lose (5,301) from holding XXL ASA or give up 82.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
XXL ASA vs. Havila Shipping ASA
Performance |
| Timeline |
| XXL ASA |
| Havila Shipping ASA |
XXL ASA and Havila Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XXL ASA and Havila Shipping
The main advantage of trading using opposite XXL ASA and Havila Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XXL ASA 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.The idea behind XXL ASA and Havila Shipping ASA 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.| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |