Correlation Between Hafnia and Safe Bulkers

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

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

Diversification Opportunities for Hafnia and Safe Bulkers

-0.66

Correlation Coefficient

Hafnia  Safe Bulkers

Excellent diversification

The 3 months correlation between Hafnia and Safe is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Hafnia i.e., Hafnia and Safe Bulkers go up and down completely randomly.

Pair Corralation between Hafnia and Safe Bulkers

Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the Safe Bulkers. In addition to that, Hafnia is 1.55 times more volatile than Safe Bulkers. It trades about -0.11 of its total potential returns per unit of risk. Safe Bulkers is currently generating about 0.06 per unit of volatility. If you would invest  352.00  in Safe Bulkers on December 27, 2024 and sell it today you would earn a total of  24.00  from holding Safe Bulkers or generate 6.82% 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.  Safe Bulkers

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

Safe Bulkers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Bulkers are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Safe Bulkers may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hafnia and Safe Bulkers

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

The idea behind Hafnia Limited and Safe Bulkers 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 Commodity Directory module to find actively traded commodities issued by global exchanges.