Correlation Between PT Astra and IAnthus Capital

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

Diversification Opportunities for PT Astra and IAnthus Capital

-0.81

Correlation Coefficient

PT Astra  IAnthus Capital

Pay attention - limited upside

The 3 months correlation between PTAIF and IAnthus is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and iAnthus Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iAnthus Capital Holdings 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 IAnthus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iAnthus Capital Holdings has no effect on the direction of PT Astra i.e., PT Astra and IAnthus Capital go up and down completely randomly.

Pair Corralation between PT Astra and IAnthus Capital

Assuming the 90 days horizon PT Astra International is expected to generate 0.66 times more return on investment than IAnthus Capital. However, PT Astra International is 1.5 times less risky than IAnthus Capital. It trades about 0.04 of its potential returns per unit of risk. iAnthus Capital Holdings is currently generating about 0.02 per unit of risk. If you would invest  36.00  in PT Astra International on September 12, 2024 and sell it today you would earn a total of  1.00  from holding PT Astra International or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	63.56%
Values	Daily Returns

PT Astra International  vs.  iAnthus Capital Holdings

PT Astra International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, PT Astra reported solid returns over the last few months and may actually be approaching a breakup point.

iAnthus Capital Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iAnthus Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic 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 PT Astra and IAnthus Capital

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

The idea behind PT Astra International and iAnthus Capital Holdings 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.