Correlation Between Hanjaya Mandala and Lion Metal

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

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

Diversification Opportunities for Hanjaya Mandala and Lion Metal

-0.48

Correlation Coefficient

Hanjaya Mandala  Lion Metal

Very good diversification

The 3 months correlation between Hanjaya and Lion is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hanjaya Mandala Sampoerna and Lion Metal Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Metal Works and Hanjaya Mandala 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 Hanjaya Mandala Sampoerna are associated (or correlated) with Lion Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Metal Works has no effect on the direction of Hanjaya Mandala i.e., Hanjaya Mandala and Lion Metal go up and down completely randomly.

Pair Corralation between Hanjaya Mandala and Lion Metal

Assuming the 90 days trading horizon Hanjaya Mandala Sampoerna is expected to generate 0.8 times more return on investment than Lion Metal. However, Hanjaya Mandala Sampoerna is 1.25 times less risky than Lion Metal. It trades about 0.07 of its potential returns per unit of risk. Lion Metal Works is currently generating about -0.08 per unit of risk. If you would invest  57,676  in Hanjaya Mandala Sampoerna on April 25, 2025 and sell it today you would earn a total of  3,324  from holding Hanjaya Mandala Sampoerna or generate 5.76% return on investment over 90 days.

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

Hanjaya Mandala Sampoerna  vs.  Lion Metal Works

Hanjaya Mandala Sampoerna

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hanjaya Mandala Sampoerna are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hanjaya Mandala may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Lion Metal Works

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Metal Works has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Hanjaya Mandala and Lion Metal

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

The idea behind Hanjaya Mandala Sampoerna and Lion Metal Works 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.