Correlation Between Hafnia and Golden Ocean

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

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

Diversification Opportunities for Hafnia and Golden Ocean

-0.85

Correlation Coefficient

Hafnia  Golden Ocean

Pay attention - limited upside

The 3 months correlation between Hafnia and Golden is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and Golden Ocean Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ocean Group 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 Golden Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ocean Group has no effect on the direction of Hafnia i.e., Hafnia and Golden Ocean go up and down completely randomly.

Pair Corralation between Hafnia and Golden Ocean

Assuming the 90 days horizon Hafnia Limited is expected to generate 1.13 times more return on investment than Golden Ocean. However, Hafnia is 1.13 times more volatile than Golden Ocean Group. It trades about 0.08 of its potential returns per unit of risk. Golden Ocean Group is currently generating about 0.02 per unit of risk. If you would invest  473.00  in Hafnia Limited on October 9, 2024 and sell it today you would earn a total of  357.00  from holding Hafnia Limited or generate 75.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	71.11%
Values	Daily Returns

Hafnia Limited  vs.  Golden Ocean Group

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. Despite nearly stable basic indicators, Hafnia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Golden Ocean Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ocean Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Hafnia and Golden Ocean

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

The idea behind Hafnia Limited and Golden Ocean Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.