Correlation Between PT Hanjaya and EMCORE

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

Diversification Opportunities for PT Hanjaya and EMCORE

0.02

Correlation Coefficient

PT Hanjaya  EMCORE

Significant diversification

The 3 months correlation between PHJMF and EMCORE is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PT Hanjaya Mandala and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE 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 EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of PT Hanjaya i.e., PT Hanjaya and EMCORE go up and down completely randomly.

Pair Corralation between PT Hanjaya and EMCORE

Assuming the 90 days horizon PT Hanjaya Mandala is expected to generate 23.31 times more return on investment than EMCORE. However, PT Hanjaya is 23.31 times more volatile than EMCORE. It trades about 0.09 of its potential returns per unit of risk. EMCORE is currently generating about 0.12 per unit of risk. If you would invest  3.26  in PT Hanjaya Mandala on December 20, 2024 and sell it today you would earn a total of  0.74  from holding PT Hanjaya Mandala or generate 22.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	87.04%
Values	Daily Returns

PT Hanjaya Mandala  vs.  EMCORE

PT Hanjaya Mandala

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PT Hanjaya Mandala are ranked lower than 7 (%) 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.

EMCORE

Risk-Adjusted Performance

OK

Over the last 90 days EMCORE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, EMCORE is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Hanjaya and EMCORE

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

The idea behind PT Hanjaya Mandala and EMCORE 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.