Correlation Between BTB Real and Hafnia

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Can any of the company-specific risk be diversified away by investing in both BTB Real 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 BTB Real and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTB Real Estate and Hafnia Limited, you can compare the effects of market volatilities on BTB Real 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 BTB Real with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTB Real and Hafnia.

Diversification Opportunities for BTB Real and Hafnia

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between BTB and Hafnia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BTB Real Estate and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and BTB Real 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 BTB Real Estate 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 BTB Real i.e., BTB Real and Hafnia go up and down completely randomly.

Pair Corralation between BTB Real and Hafnia

Assuming the 90 days horizon BTB Real Estate is expected to generate 0.39 times more return on investment than Hafnia. However, BTB Real Estate is 2.56 times less risky than Hafnia. It trades about 0.14 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.18 per unit of risk. If you would invest  240.00  in BTB Real Estate on September 1, 2024 and sell it today you would earn a total of  18.00  from holding BTB Real Estate or generate 7.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

BTB Real Estate  vs.  Hafnia Limited

 Performance 
       Timeline  
BTB Real Estate 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in BTB Real Estate are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, BTB Real may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Hafnia Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

BTB Real and Hafnia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BTB Real and Hafnia

The main advantage of trading using opposite BTB Real and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTB Real 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 BTB Real Estate 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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