Correlation Between Hafnia and Globus Maritime

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

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

Diversification Opportunities for Hafnia and Globus Maritime

0.79

Correlation Coefficient

Hafnia  Globus Maritime

Poor diversification

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

Pair Corralation between Hafnia and Globus Maritime

Given the investment horizon of 90 days Hafnia Limited is expected to generate 0.51 times more return on investment than Globus Maritime. However, Hafnia Limited is 1.98 times less risky than Globus Maritime. It trades about 0.18 of its potential returns per unit of risk. Globus Maritime is currently generating about -0.17 per unit of risk. If you would invest  483.00  in Hafnia Limited on September 13, 2024 and sell it today you would earn a total of  47.00  from holding Hafnia Limited or generate 9.73% return on investment over 90 days.

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

Hafnia Limited  vs.  Globus Maritime

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

Globus Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globus Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hafnia and Globus Maritime

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

The idea behind Hafnia Limited and Globus Maritime 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.