Correlation Between Hafnia and CARDINAL

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

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

Diversification Opportunities for Hafnia and CARDINAL

0.1

Correlation Coefficient

Hafnia  CARDINAL

Average diversification

The 3 months correlation between Hafnia and CARDINAL is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and CARDINAL HEALTH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH 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 CARDINAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARDINAL HEALTH INC has no effect on the direction of Hafnia i.e., Hafnia and CARDINAL go up and down completely randomly.

Pair Corralation between Hafnia and CARDINAL

Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the CARDINAL. In addition to that, Hafnia is 2.63 times more volatile than CARDINAL HEALTH INC. It trades about -0.12 of its total potential returns per unit of risk. CARDINAL HEALTH INC is currently generating about -0.06 per unit of volatility. If you would invest  8,486  in CARDINAL HEALTH INC on December 2, 2024 and sell it today you would lose (237.00) from holding CARDINAL HEALTH INC or give up 2.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	62.3%
Values	Daily Returns

Hafnia Limited  vs.  CARDINAL HEALTH INC

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 uncertain 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.

CARDINAL HEALTH INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CARDINAL HEALTH INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CARDINAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hafnia and CARDINAL

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

The idea behind Hafnia Limited and CARDINAL HEALTH 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.