Correlation Between Nippon Steel and Hafnia
Can any of the company-specific risk be diversified away by investing in both Nippon Steel 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 Nippon Steel and Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Steel and Hafnia Limited, you can compare the effects of market volatilities on Nippon Steel 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 Nippon Steel with a short position of Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Steel and Hafnia.
Diversification Opportunities for Nippon Steel and Hafnia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nippon and Hafnia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Steel and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Nippon Steel 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 Nippon Steel 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 Nippon Steel i.e., Nippon Steel and Hafnia go up and down completely randomly.
Pair Corralation between Nippon Steel and Hafnia
Assuming the 90 days trading horizon Nippon Steel is expected to generate 0.34 times more return on investment than Hafnia. However, Nippon Steel is 2.92 times less risky than Hafnia. It trades about -0.1 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.06 per unit of risk. If you would invest 2,020 in Nippon Steel on September 24, 2024 and sell it today you would lose (207.00) from holding Nippon Steel or give up 10.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 84.62% |
Values | Daily Returns |
Nippon Steel vs. Hafnia Limited
Performance |
Timeline |
Nippon Steel |
Hafnia Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nippon Steel and Hafnia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nippon Steel and Hafnia
The main advantage of trading using opposite Nippon Steel and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Steel 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.Nippon Steel vs. Apple Inc | Nippon Steel vs. Apple Inc | Nippon Steel vs. Apple Inc | Nippon Steel vs. Microsoft |
Hafnia vs. KRAKATAU STEEL B | Hafnia vs. Nippon Steel | Hafnia vs. Boiron SA | Hafnia vs. UNIQA INSURANCE GR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |