Correlation Between PT Hanjaya and First Farmers

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

Diversification Opportunities for PT Hanjaya and First Farmers

-0.02

Correlation Coefficient

PT Hanjaya  First Farmers

Good diversification

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

Pair Corralation between PT Hanjaya and First Farmers

Assuming the 90 days horizon PT Hanjaya Mandala is expected to generate 26.75 times more return on investment than First Farmers. However, PT Hanjaya is 26.75 times more volatile than First Farmers Financial. It trades about 0.14 of its potential returns per unit of risk. First Farmers Financial is currently generating about 0.02 per unit of risk. If you would invest  2.00  in PT Hanjaya Mandala on May 10, 2025 and sell it today you would earn a total of  3.00  from holding PT Hanjaya Mandala or generate 150.0% return on investment over 90 days.

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

PT Hanjaya Mandala  vs.  First Farmers Financial

PT Hanjaya Mandala

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Hanjaya Mandala are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, PT Hanjaya reported solid returns over the last few months and may actually be approaching a breakup point.

First Farmers Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Farmers Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, First Farmers is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Hanjaya and First Farmers

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

The idea behind PT Hanjaya Mandala and First Farmers Financial 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.