Correlation Between PT Hanjaya and Universal

Can any of the company-specific risk be diversified away by investing in both PT Hanjaya and Universal 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 Universal 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 Universal, you can compare the effects of market volatilities on PT Hanjaya and Universal 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 Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hanjaya and Universal.

Diversification Opportunities for PT Hanjaya and Universal

-0.53

Correlation Coefficient

PT Hanjaya  Universal

Excellent diversification

The 3 months correlation between PHJMF and Universal is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Hanjaya Mandala and Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal 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 Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal has no effect on the direction of PT Hanjaya i.e., PT Hanjaya and Universal go up and down completely randomly.

Pair Corralation between PT Hanjaya and Universal

Assuming the 90 days horizon PT Hanjaya is expected to generate 2.18 times less return on investment than Universal. In addition to that, PT Hanjaya is 3.16 times more volatile than Universal. It trades about 0.02 of its total potential returns per unit of risk. Universal is currently generating about 0.13 per unit of volatility. If you would invest  5,091  in Universal on September 15, 2024 and sell it today you would earn a total of  557.00  from holding Universal or generate 10.94% return on investment over 90 days.

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

PT Hanjaya Mandala  vs.  Universal

PT Hanjaya Mandala

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Hanjaya Mandala are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, PT Hanjaya is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Universal

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Universal are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Universal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PT Hanjaya and Universal

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

The idea behind PT Hanjaya Mandala and Universal 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.