Correlation Between Hafnia and Uber Technologies

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

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

Diversification Opportunities for Hafnia and Uber Technologies

0.2

Correlation Coefficient

Hafnia  Uber Technologies

Modest diversification

The 3 months correlation between Hafnia and Uber is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Hafnia i.e., Hafnia and Uber Technologies go up and down completely randomly.

Pair Corralation between Hafnia and Uber Technologies

Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the Uber Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Hafnia Limited is 1.13 times less risky than Uber Technologies. The stock trades about -0.17 of its potential returns per unit of risk. The Uber Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  7,189  in Uber Technologies on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Uber Technologies or generate 0.1% return on investment over 90 days.

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

Hafnia Limited  vs.  Uber Technologies

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 unsteady 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.

Uber Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Uber Technologies is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hafnia and Uber Technologies

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

The idea behind Hafnia Limited and Uber Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.