Correlation Between Hafnia and Ihuman

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

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

Diversification Opportunities for Hafnia and Ihuman

0.24

Correlation Coefficient

Hafnia  Ihuman

Modest diversification

The 3 months correlation between Hafnia and Ihuman is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Hafnia i.e., Hafnia and Ihuman go up and down completely randomly.

Pair Corralation between Hafnia and Ihuman

Given the investment horizon of 90 days Hafnia Limited is expected to generate 1.13 times more return on investment than Ihuman. However, Hafnia is 1.13 times more volatile than Ihuman Inc. It trades about -0.03 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.17 per unit of risk. If you would invest  584.00  in Hafnia Limited on August 31, 2024 and sell it today you would lose (15.00) from holding Hafnia Limited or give up 2.57% of portfolio value over 90 days.

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

Hafnia Limited  vs.  Ihuman Inc

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 December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ihuman Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Ihuman is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hafnia and Ihuman

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

The idea behind Hafnia Limited and Ihuman Inc 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.