Correlation Between Cedar Realty and Hafnia

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

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

Diversification Opportunities for Cedar Realty and Hafnia

-0.43

Correlation Coefficient

Cedar Realty  Hafnia

Very good diversification

The 3 months correlation between Cedar and Hafnia is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Cedar Realty 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 Cedar Realty Trust 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 Cedar Realty i.e., Cedar Realty and Hafnia go up and down completely randomly.

Pair Corralation between Cedar Realty and Hafnia

Assuming the 90 days trading horizon Cedar Realty is expected to generate 1.56 times less return on investment than Hafnia. In addition to that, Cedar Realty is 1.03 times more volatile than Hafnia Limited. It trades about 0.04 of its total potential returns per unit of risk. Hafnia Limited is currently generating about 0.06 per unit of volatility. If you would invest  529.00  in Hafnia Limited on October 23, 2024 and sell it today you would earn a total of  14.00  from holding Hafnia Limited or generate 2.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cedar Realty Trust  vs.  Hafnia Limited

Cedar Realty Trust

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cedar Realty may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 very healthy technical and fundamental indicators, Hafnia is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cedar Realty and Hafnia

The main advantage of trading using opposite Cedar Realty and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty 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 Cedar Realty Trust 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.