Correlation Between Hafnia and ETF Managers

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

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

Diversification Opportunities for Hafnia and ETF Managers

0.1

Correlation Coefficient

Hafnia  ETF Managers

Average diversification

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

Pair Corralation between Hafnia and ETF Managers

Assuming the 90 days trading horizon Hafnia is expected to under-perform the ETF Managers. But the stock apears to be less risky and, when comparing its historical volatility, Hafnia is 1.47 times less risky than ETF Managers. The stock trades about -0.13 of its potential returns per unit of risk. The ETF Managers Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  991.00  in ETF Managers Group on December 28, 2024 and sell it today you would earn a total of  88.00  from holding ETF Managers Group or generate 8.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Hafnia  vs.  ETF Managers Group

Hafnia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hafnia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic 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.

ETF Managers Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Managers Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, ETF Managers unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hafnia and ETF Managers

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

The idea behind Hafnia and ETF Managers 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.