Correlation Between PT Astra and MFS High

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

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

Diversification Opportunities for PT Astra and MFS High

0.56

Correlation Coefficient

PT Astra  MFS High

Very weak diversification

The 3 months correlation between PTAIF and MFS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income and PT Astra 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 Astra International are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Income has no effect on the direction of PT Astra i.e., PT Astra and MFS High go up and down completely randomly.

Pair Corralation between PT Astra and MFS High

Assuming the 90 days horizon PT Astra International is expected to under-perform the MFS High. In addition to that, PT Astra is 6.93 times more volatile than MFS High Income. It trades about -0.3 of its total potential returns per unit of risk. MFS High Income is currently generating about -0.29 per unit of volatility. If you would invest  384.00  in MFS High Income on October 4, 2024 and sell it today you would lose (16.00) from holding MFS High Income or give up 4.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

PT Astra International  vs.  MFS High Income

PT Astra International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Astra International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MFS High Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFS High Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MFS High is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PT Astra and MFS High

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

The idea behind PT Astra International and MFS High Income 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.