Correlation Between Avient Corp and Hafnia

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

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

Diversification Opportunities for Avient Corp and Hafnia

0.0

Correlation Coefficient

Avient Corp  Hafnia

Pay attention - limited upside

The 3 months correlation between Avient and Hafnia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Avient Corp 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 Avient Corp 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 Avient Corp i.e., Avient Corp and Hafnia go up and down completely randomly.

Pair Corralation between Avient Corp and Hafnia

Given the investment horizon of 90 days Avient Corp is expected to generate 3.03 times less return on investment than Hafnia. But when comparing it to its historical volatility, Avient Corp is 1.42 times less risky than Hafnia. It trades about 0.03 of its potential returns per unit of risk. Hafnia Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  328.00  in Hafnia Limited on September 26, 2024 and sell it today you would earn a total of  233.00  from holding Hafnia Limited or generate 71.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	81.85%
Values	Daily Returns

Avient Corp  vs.  Hafnia Limited

Avient Corp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Avient Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hafnia Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hafnia Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Avient Corp and Hafnia

The main advantage of trading using opposite Avient Corp and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp 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 Avient Corp 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.