Correlation Between Havila Shipping and Goodtech

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

By analyzing existing cross correlation between Havila Shipping ASA and Goodtech, you can compare the effects of market volatilities on Havila Shipping and Goodtech 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 Havila Shipping with a short position of Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Havila Shipping and Goodtech.

Diversification Opportunities for Havila Shipping and Goodtech

0.18

Correlation Coefficient

Havila Shipping  Goodtech

Average diversification

The 3 months correlation between Havila and Goodtech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Havila Shipping ASA and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech and Havila Shipping 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 Havila Shipping ASA are associated (or correlated) with Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Havila Shipping i.e., Havila Shipping and Goodtech go up and down completely randomly.

Pair Corralation between Havila Shipping and Goodtech

Assuming the 90 days trading horizon Havila Shipping ASA is expected to under-perform the Goodtech. In addition to that, Havila Shipping is 2.38 times more volatile than Goodtech. It trades about -0.21 of its total potential returns per unit of risk. Goodtech is currently generating about -0.03 per unit of volatility. If you would invest  920.00  in Goodtech on December 1, 2024 and sell it today you would lose (38.00) from holding Goodtech or give up 4.13% of portfolio value over 90 days.

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

Havila Shipping ASA  vs.  Goodtech

Havila Shipping ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Havila Shipping ASA 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 essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Goodtech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Goodtech is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Havila Shipping and Goodtech

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

The idea behind Havila Shipping ASA and Goodtech 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.