Correlation Between PT Hanjaya and Unit

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

Diversification Opportunities for PT Hanjaya and Unit

-0.15

Correlation Coefficient

PT Hanjaya  Unit

Good diversification

The 3 months correlation between PHJMF and Unit is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Hanjaya Mandala and Unit Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unit 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 Unit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unit has no effect on the direction of PT Hanjaya i.e., PT Hanjaya and Unit go up and down completely randomly.

Pair Corralation between PT Hanjaya and Unit

Assuming the 90 days horizon PT Hanjaya Mandala is expected to generate 0.92 times more return on investment than Unit. However, PT Hanjaya Mandala is 1.09 times less risky than Unit. It trades about 0.08 of its potential returns per unit of risk. Unit Corporation is currently generating about 0.04 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	71.19%
Values	Daily Returns

PT Hanjaya Mandala  vs.  Unit Corp.

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.

Unit

Risk-Adjusted Performance

Weak

Over the last 90 days Unit Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady fundamental indicators, Unit showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Hanjaya and Unit

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

The idea behind PT Hanjaya Mandala and Unit Corporation 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.