Correlation Between PCI Biotech and Hafnia

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

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

Diversification Opportunities for PCI Biotech and Hafnia

0.7

Correlation Coefficient

PCI Biotech  Hafnia

Poor diversification

The 3 months correlation between PCI and Hafnia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PCI Biotech Holding and Hafnia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia and PCI Biotech 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 PCI Biotech Holding 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 has no effect on the direction of PCI Biotech i.e., PCI Biotech and Hafnia go up and down completely randomly.

Pair Corralation between PCI Biotech and Hafnia

Assuming the 90 days trading horizon PCI Biotech is expected to generate 2.07 times less return on investment than Hafnia. In addition to that, PCI Biotech is 1.96 times more volatile than Hafnia. It trades about 0.04 of its total potential returns per unit of risk. Hafnia is currently generating about 0.18 per unit of volatility. If you would invest  4,547  in Hafnia on April 25, 2025 and sell it today you would earn a total of  1,061  from holding Hafnia or generate 23.33% return on investment over 90 days.

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

PCI Biotech Holding  vs.  Hafnia

PCI Biotech Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PCI Biotech Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, PCI Biotech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Hafnia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hafnia are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Hafnia displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PCI Biotech and Hafnia

The main advantage of trading using opposite PCI Biotech and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCI Biotech 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 PCI Biotech Holding and Hafnia 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.