Correlation Between Hudson Pacific and Hafnia

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

By analyzing existing cross correlation between Hudson Pacific Properties and Hafnia Limited, you can compare the effects of market volatilities on Hudson Pacific and Hafnia 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 Hudson Pacific with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Pacific and Hafnia.

Diversification Opportunities for Hudson Pacific and Hafnia

-0.26

Correlation Coefficient

Hudson Pacific  Hafnia

Very good diversification

The 3 months correlation between Hudson and Hafnia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Hudson Pacific 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 Hudson Pacific Properties are associated (or correlated) with Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Hudson Pacific i.e., Hudson Pacific and Hafnia go up and down completely randomly.

Pair Corralation between Hudson Pacific and Hafnia

Considering the 90-day investment horizon Hudson Pacific Properties is expected to generate 0.97 times more return on investment than Hafnia. However, Hudson Pacific Properties is 1.03 times less risky than Hafnia. It trades about 0.04 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.37 per unit of risk. If you would invest  304.00  in Hudson Pacific Properties on December 4, 2024 and sell it today you would earn a total of  6.00  from holding Hudson Pacific Properties or generate 1.97% return on investment over 90 days.

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

Hudson Pacific Properties  vs.  Hafnia Limited

Hudson Pacific Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hudson Pacific Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 conflicting 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.

Pair Trading with Hudson Pacific and Hafnia

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

The idea behind Hudson Pacific Properties and Hafnia Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.