Correlation Between Hafnia and DT Cloud

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

By analyzing existing cross correlation between Hafnia Limited and DT Cloud Acquisition, you can compare the effects of market volatilities on Hafnia and DT Cloud 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 DT Cloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and DT Cloud.

Diversification Opportunities for Hafnia and DT Cloud

-0.79

Correlation Coefficient

Hafnia  DT Cloud

Pay attention - limited upside

The 3 months correlation between Hafnia and DYCQ is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and DT Cloud Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DT Cloud Acquisition 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 DT Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DT Cloud Acquisition has no effect on the direction of Hafnia i.e., Hafnia and DT Cloud go up and down completely randomly.

Pair Corralation between Hafnia and DT Cloud

Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the DT Cloud. In addition to that, Hafnia is 19.4 times more volatile than DT Cloud Acquisition. It trades about -0.05 of its total potential returns per unit of risk. DT Cloud Acquisition is currently generating about 0.17 per unit of volatility. If you would invest  1,045  in DT Cloud Acquisition on December 19, 2024 and sell it today you would earn a total of  18.00  from holding DT Cloud Acquisition or generate 1.72% return on investment over 90 days.

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

Hafnia Limited  vs.  DT Cloud Acquisition

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.

DT Cloud Acquisition

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DT Cloud Acquisition are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, DT Cloud is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hafnia and DT Cloud

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

The idea behind Hafnia Limited and DT Cloud Acquisition 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..