Correlation Between Hafnia and JIADE LIMITED

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

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

Diversification Opportunities for Hafnia and JIADE LIMITED

-0.23

Correlation Coefficient

Hafnia  JIADE LIMITED

Very good diversification

The 3 months correlation between Hafnia and JIADE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and JIADE LIMITED Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIADE LIMITED Common 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 JIADE LIMITED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIADE LIMITED Common has no effect on the direction of Hafnia i.e., Hafnia and JIADE LIMITED go up and down completely randomly.

Pair Corralation between Hafnia and JIADE LIMITED

Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the JIADE LIMITED. But the stock apears to be less risky and, when comparing its historical volatility, Hafnia Limited is 8.97 times less risky than JIADE LIMITED. The stock trades about -0.14 of its potential returns per unit of risk. The JIADE LIMITED Common is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  73.00  in JIADE LIMITED Common on September 12, 2024 and sell it today you would lose (9.50) from holding JIADE LIMITED Common or give up 13.01% of portfolio value over 90 days.

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

Hafnia Limited  vs.  JIADE LIMITED Common

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.

JIADE LIMITED Common

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JIADE LIMITED Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, JIADE LIMITED reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hafnia and JIADE LIMITED

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

The idea behind Hafnia Limited and JIADE LIMITED Common 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.