Correlation Between Mondee Holdings and Hafnia

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

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

Diversification Opportunities for Mondee Holdings and Hafnia

0.45

Correlation Coefficient

Mondee Holdings  Hafnia

Very weak diversification

The 3 months correlation between Mondee and Hafnia is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mondee Holdings and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited and Mondee Holdings 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 Mondee Holdings 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 Mondee Holdings i.e., Mondee Holdings and Hafnia go up and down completely randomly.

Pair Corralation between Mondee Holdings and Hafnia

Given the investment horizon of 90 days Mondee Holdings is expected to under-perform the Hafnia. In addition to that, Mondee Holdings is 2.2 times more volatile than Hafnia Limited. It trades about -0.16 of its total potential returns per unit of risk. Hafnia Limited is currently generating about -0.21 per unit of volatility. If you would invest  715.00  in Hafnia Limited on August 20, 2024 and sell it today you would lose (188.00) from holding Hafnia Limited or give up 26.29% of portfolio value over 90 days.

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

Mondee Holdings  vs.  Hafnia Limited

Mondee Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mondee Holdings and Hafnia

The main advantage of trading using opposite Mondee Holdings and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondee Holdings 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 Mondee Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.