Correlation Between Universal and PT Hanjaya

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

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

Diversification Opportunities for Universal and PT Hanjaya

-0.61

Correlation Coefficient

Universal  PT Hanjaya

Excellent diversification

The 3 months correlation between Universal and PHJMF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Universal 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 Universal 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 Universal 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 Universal i.e., Universal and PT Hanjaya go up and down completely randomly.

Pair Corralation between Universal and PT Hanjaya

Considering the 90-day investment horizon Universal is expected to generate 0.28 times more return on investment than PT Hanjaya. However, Universal is 3.57 times less risky than PT Hanjaya. It trades about 0.15 of its potential returns per unit of risk. PT Hanjaya Mandala is currently generating about -0.22 per unit of risk. If you would invest  5,029  in Universal on September 23, 2024 and sell it today you would earn a total of  434.00  from holding Universal or generate 8.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Universal  vs.  PT Hanjaya Mandala

Universal

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Universal are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Universal is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PT Hanjaya Mandala

Risk-Adjusted Performance

0 of 100

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 abnormal performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Universal and PT Hanjaya

The main advantage of trading using opposite Universal and PT Hanjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal 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 Universal 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.