Correlation Between Hafnia and Aegon NV

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

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

Diversification Opportunities for Hafnia and Aegon NV

-0.01

Correlation Coefficient

Hafnia  Aegon NV

Good diversification

The 3 months correlation between Hafnia and Aegon is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and Hafnia 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 Hafnia Limited are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Hafnia i.e., Hafnia and Aegon NV go up and down completely randomly.

Pair Corralation between Hafnia and Aegon NV

Given the investment horizon of 90 days Hafnia Limited is expected to generate 1.58 times more return on investment than Aegon NV. However, Hafnia is 1.58 times more volatile than Aegon NV ADR. It trades about 0.05 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.04 per unit of risk. If you would invest  403.00  in Hafnia Limited on October 4, 2024 and sell it today you would earn a total of  160.00  from holding Hafnia Limited or generate 39.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Hafnia Limited  vs.  Aegon NV ADR

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aegon NV ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegon NV ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Aegon NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hafnia and Aegon NV

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

The idea behind Hafnia Limited and Aegon NV ADR 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.