Correlation Between Kaival Brands and PT Hanjaya

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

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

Diversification Opportunities for Kaival Brands and PT Hanjaya

-0.18

Correlation Coefficient

Kaival Brands  PT Hanjaya

Good diversification

The 3 months correlation between Kaival and PHJMF is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kaival Brands Innovations and PT Hanjaya Mandala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hanjaya Mandala and Kaival Brands 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 Kaival Brands Innovations are associated (or correlated) with PT Hanjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hanjaya Mandala has no effect on the direction of Kaival Brands i.e., Kaival Brands and PT Hanjaya go up and down completely randomly.

Pair Corralation between Kaival Brands and PT Hanjaya

Given the investment horizon of 90 days Kaival Brands Innovations is expected to under-perform the PT Hanjaya. But the stock apears to be less risky and, when comparing its historical volatility, Kaival Brands Innovations is 1.85 times less risky than PT Hanjaya. The stock trades about -0.12 of its potential returns per unit of risk. The PT Hanjaya Mandala is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3.97  in PT Hanjaya Mandala on December 28, 2024 and sell it today you would earn a total of  0.62  from holding PT Hanjaya Mandala or generate 15.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Kaival Brands Innovations  vs.  PT Hanjaya Mandala

Kaival Brands Innovations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaival Brands Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PT Hanjaya Mandala

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Hanjaya Mandala are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, PT Hanjaya reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaival Brands and PT Hanjaya

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

The idea behind Kaival Brands Innovations and PT Hanjaya Mandala 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.