Correlation Between Delta Air and Hafnia

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

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

Diversification Opportunities for Delta Air and Hafnia

0.67

Correlation Coefficient

Delta Air  Hafnia

Poor diversification

The 3 months correlation between Delta and Hafnia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Delta Air 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 Delta Air Lines 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 Delta Air i.e., Delta Air and Hafnia go up and down completely randomly.

Pair Corralation between Delta Air and Hafnia

Considering the 90-day investment horizon Delta Air Lines is expected to under-perform the Hafnia. But the stock apears to be less risky and, when comparing its historical volatility, Delta Air Lines is 1.2 times less risky than Hafnia. The stock trades about -0.15 of its potential returns per unit of risk. The Hafnia Limited is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  507.00  in Hafnia Limited on December 19, 2024 and sell it today you would lose (64.00) from holding Hafnia Limited or give up 12.62% of portfolio value over 90 days.

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

Delta Air Lines  vs.  Hafnia Limited

Delta Air Lines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Air Lines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Hafnia Limited

Risk-Adjusted Performance

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 latest fragile performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Delta Air and Hafnia

The main advantage of trading using opposite Delta Air and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air 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 Delta Air Lines 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.