Correlation Between Hafnia and TWFG,

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

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

Diversification Opportunities for Hafnia and TWFG,

-0.8

Correlation Coefficient

Hafnia  TWFG,

Pay attention - limited upside

The 3 months correlation between Hafnia and TWFG, is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A and Hafnia 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 Hafnia Limited are associated (or correlated) with TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of Hafnia i.e., Hafnia and TWFG, go up and down completely randomly.

Pair Corralation between Hafnia and TWFG,

Given the investment horizon of 90 days Hafnia Limited is expected to under-perform the TWFG,. But the stock apears to be less risky and, when comparing its historical volatility, Hafnia Limited is 1.2 times less risky than TWFG,. The stock trades about -0.12 of its potential returns per unit of risk. The TWFG, Class A is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,200  in TWFG, Class A on September 21, 2024 and sell it today you would earn a total of  669.00  from holding TWFG, Class A or generate 30.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.07%
Values	Daily Returns

Hafnia Limited  vs.  TWFG, Class A

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. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

TWFG, Class A

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, TWFG, is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hafnia and TWFG,

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

The idea behind Hafnia Limited and TWFG, Class A 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.