Correlation Between Kawasaki Kisen and Hafnia

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

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

Diversification Opportunities for Kawasaki Kisen and Hafnia

-0.79

Correlation Coefficient

Kawasaki Kisen  Hafnia

Pay attention - limited upside

The 3 months correlation between Kawasaki and Hafnia is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kawasaki Kisen Kaisha and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Kawasaki Kisen 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 Kawasaki Kisen Kaisha 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 Kawasaki Kisen i.e., Kawasaki Kisen and Hafnia go up and down completely randomly.

Pair Corralation between Kawasaki Kisen and Hafnia

If you would invest  830.00  in Hafnia Limited on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Hafnia Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Kawasaki Kisen Kaisha  vs.  Hafnia Limited

Kawasaki Kisen Kaisha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kawasaki Kisen Kaisha has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Kawasaki Kisen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Kawasaki Kisen and Hafnia

The main advantage of trading using opposite Kawasaki Kisen and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kawasaki Kisen 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 Kawasaki Kisen Kaisha 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.