Correlation Between Saia and Hafnia

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

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

Diversification Opportunities for Saia and Hafnia

-0.58

Correlation Coefficient

Saia  Hafnia

Excellent diversification

The 3 months correlation between Saia and Hafnia is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Saia 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 Saia Inc 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 Saia i.e., Saia and Hafnia go up and down completely randomly.

Pair Corralation between Saia and Hafnia

Given the investment horizon of 90 days Saia Inc is expected to under-perform the Hafnia. But the stock apears to be less risky and, when comparing its historical volatility, Saia Inc is 1.19 times less risky than Hafnia. The stock trades about -0.05 of its potential returns per unit of risk. The Hafnia Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Hafnia Limited on November 20, 2024 and sell it today you would lose (18.00) from holding Hafnia Limited or give up 3.4% of portfolio value over 90 days.

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

Saia Inc  vs.  Hafnia Limited

Saia Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company 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 very healthy technical and fundamental indicators, Hafnia is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Saia and Hafnia

The main advantage of trading using opposite Saia and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia 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 Saia Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.