Correlation Between Haffner Energy and Waga Energy

Can any of the company-specific risk be diversified away by investing in both Haffner Energy and Waga Energy 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 Haffner Energy and Waga Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Haffner Energy SA and Waga Energy SA, you can compare the effects of market volatilities on Haffner Energy and Waga Energy 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 Haffner Energy with a short position of Waga Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haffner Energy and Waga Energy.

Diversification Opportunities for Haffner Energy and Waga Energy

0.09

Correlation Coefficient

Haffner Energy  Waga Energy

Significant diversification

The 3 months correlation between Haffner and Waga is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Haffner Energy SA and Waga Energy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waga Energy SA and Haffner Energy 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 Haffner Energy SA are associated (or correlated) with Waga Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waga Energy SA has no effect on the direction of Haffner Energy i.e., Haffner Energy and Waga Energy go up and down completely randomly.

Pair Corralation between Haffner Energy and Waga Energy

Assuming the 90 days trading horizon Haffner Energy SA is expected to under-perform the Waga Energy. In addition to that, Haffner Energy is 1.93 times more volatile than Waga Energy SA. It trades about -0.23 of its total potential returns per unit of risk. Waga Energy SA is currently generating about -0.24 per unit of volatility. If you would invest  1,770  in Waga Energy SA on September 2, 2024 and sell it today you would lose (218.00) from holding Waga Energy SA or give up 12.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Haffner Energy SA  vs.  Waga Energy SA

Haffner Energy SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Haffner Energy SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Haffner Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Waga Energy SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Waga Energy SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Waga Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Haffner Energy and Waga Energy

The main advantage of trading using opposite Haffner Energy and Waga Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haffner Energy position performs unexpectedly, Waga Energy 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 Waga Energy will offset losses from the drop in Waga Energy's long position.

The idea behind Haffner Energy SA and Waga Energy SA 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.