Correlation Between PT Hanjaya and Thyssenkrupp

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

By analyzing existing cross correlation between PT Hanjaya Mandala and Thyssenkrupp AG ADR, you can compare the effects of market volatilities on PT Hanjaya and Thyssenkrupp 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 PT Hanjaya with a short position of Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hanjaya and Thyssenkrupp.

Diversification Opportunities for PT Hanjaya and Thyssenkrupp

-0.55

Correlation Coefficient

PT Hanjaya  Thyssenkrupp

Excellent diversification

The 3 months correlation between PHJMF and Thyssenkrupp is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PT Hanjaya Mandala and Thyssenkrupp AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thyssenkrupp AG ADR and PT Hanjaya 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 PT Hanjaya Mandala are associated (or correlated) with Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thyssenkrupp AG ADR has no effect on the direction of PT Hanjaya i.e., PT Hanjaya and Thyssenkrupp go up and down completely randomly.

Pair Corralation between PT Hanjaya and Thyssenkrupp

Assuming the 90 days horizon PT Hanjaya Mandala is expected to under-perform the Thyssenkrupp. In addition to that, PT Hanjaya is 1.52 times more volatile than Thyssenkrupp AG ADR. It trades about -0.06 of its total potential returns per unit of risk. Thyssenkrupp AG ADR is currently generating about 0.07 per unit of volatility. If you would invest  366.00  in Thyssenkrupp AG ADR on September 25, 2024 and sell it today you would earn a total of  49.00  from holding Thyssenkrupp AG ADR or generate 13.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

PT Hanjaya Mandala  vs.  Thyssenkrupp AG ADR

PT Hanjaya Mandala

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Hanjaya Mandala has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Thyssenkrupp AG ADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thyssenkrupp AG ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Thyssenkrupp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Hanjaya and Thyssenkrupp

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

The idea behind PT Hanjaya Mandala and Thyssenkrupp AG ADR 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.