Correlation Between PT Hanjaya and Blue Capital

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

Diversification Opportunities for PT Hanjaya and Blue Capital

0.0

Correlation Coefficient

PT Hanjaya  Blue Capital

Pay attention - limited upside

The 3 months correlation between PHJMF and Blue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Hanjaya Mandala and Blue Capital Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Capital Reinsurance 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 Blue Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Capital Reinsurance has no effect on the direction of PT Hanjaya i.e., PT Hanjaya and Blue Capital go up and down completely randomly.

Pair Corralation between PT Hanjaya and Blue Capital

Assuming the 90 days horizon PT Hanjaya Mandala is expected to generate 1.2 times more return on investment than Blue Capital. However, PT Hanjaya is 1.2 times more volatile than Blue Capital Reinsurance. It trades about 0.04 of its potential returns per unit of risk. Blue Capital Reinsurance is currently generating about -0.26 per unit of risk. If you would invest  5.25  in PT Hanjaya Mandala on October 10, 2024 and sell it today you would lose (1.75) from holding PT Hanjaya Mandala or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.53%
Values	Daily Returns

PT Hanjaya Mandala  vs.  Blue Capital Reinsurance

PT Hanjaya Mandala

Risk-Adjusted Performance

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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 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.

Blue Capital Reinsurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Capital Reinsurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Blue Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Hanjaya and Blue Capital

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

The idea behind PT Hanjaya Mandala and Blue Capital Reinsurance 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..