Correlation Between PT Hanjaya and Kaival Brands

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

Diversification Opportunities for PT Hanjaya and Kaival Brands

-0.18

Correlation Coefficient

PT Hanjaya  Kaival Brands

Good diversification

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

Pair Corralation between PT Hanjaya and Kaival Brands

Assuming the 90 days horizon PT Hanjaya Mandala is expected to generate 1.85 times more return on investment than Kaival Brands. However, PT Hanjaya is 1.85 times more volatile than Kaival Brands Innovations. It trades about 0.08 of its potential returns per unit of risk. Kaival Brands Innovations is currently generating about -0.12 per unit of risk. 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

PT Hanjaya Mandala  vs.  Kaival Brands Innovations

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.

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.

Pair Trading with PT Hanjaya and Kaival Brands

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

The idea behind PT Hanjaya Mandala and Kaival Brands Innovations 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.