Correlation Between Hafnia and USA Compression
Can any of the company-specific risk be diversified away by investing in both Hafnia and USA Compression 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 USA Compression into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and USA Compression Partners, you can compare the effects of market volatilities on Hafnia and USA Compression 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 USA Compression. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and USA Compression.
Diversification Opportunities for Hafnia and USA Compression
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hafnia and USA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and USA Compression Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Compression Partners 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 USA Compression. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Compression Partners has no effect on the direction of Hafnia i.e., Hafnia and USA Compression go up and down completely randomly.
Pair Corralation between Hafnia and USA Compression
Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the USA Compression. In addition to that, Hafnia is 1.69 times more volatile than USA Compression Partners. It trades about -0.34 of its total potential returns per unit of risk. USA Compression Partners is currently generating about 0.04 per unit of volatility. If you would invest 2,665 in USA Compression Partners on December 2, 2024 and sell it today you would earn a total of 37.00 from holding USA Compression Partners or generate 1.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hafnia Limited vs. USA Compression Partners
Performance |
Timeline |
Hafnia Limited |
USA Compression Partners |
Hafnia and USA Compression Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hafnia and USA Compression
The main advantage of trading using opposite Hafnia and USA Compression positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia position performs unexpectedly, USA Compression 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 USA Compression will offset losses from the drop in USA Compression's long position.Hafnia vs. Essent Group | Hafnia vs. Universal Insurance Holdings | Hafnia vs. Palomar Holdings | Hafnia vs. Evergy, |
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Check out your portfolio center.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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