Correlation Between British American and PT Hanjaya
Can any of the company-specific risk be diversified away by investing in both British American 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 British American and PT Hanjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and PT Hanjaya Mandala, you can compare the effects of market volatilities on British American 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 British American with a short position of PT Hanjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and PT Hanjaya.
Diversification Opportunities for British American and PT Hanjaya
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between British and PHJMF is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco 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 British American 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 British American Tobacco 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 British American i.e., British American and PT Hanjaya go up and down completely randomly.
Pair Corralation between British American and PT Hanjaya
Assuming the 90 days horizon British American Tobacco is expected to generate 0.42 times more return on investment than PT Hanjaya. However, British American Tobacco is 2.37 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 -0.19 per unit of risk. If you would invest 3,790 in British American Tobacco on November 9, 2024 and sell it today you would earn a total of 277.00 from holding British American Tobacco or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
British American Tobacco vs. PT Hanjaya Mandala
Performance |
| Timeline |
| British American Tobacco |
| PT Hanjaya Mandala |
British American and PT Hanjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and PT Hanjaya
The main advantage of trading using opposite British American and PT Hanjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American 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.| British American vs. Japan Tobacco ADR | British American vs. Imperial Brands PLC | British American vs. RLX Technology | British American vs. British American Tobacco |
| PT Hanjaya vs. Pyxus International | PT Hanjaya vs. 22nd Century Group | PT Hanjaya vs. Greenlane Holdings | PT Hanjaya vs. Japan Tobacco |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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