Correlation Between PT Astra and Medicure

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

Diversification Opportunities for PT Astra and Medicure

-0.1

Correlation Coefficient

PT Astra  Medicure

Good diversification

The 3 months correlation between PTAIF and Medicure is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Medicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicure 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 Medicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicure has no effect on the direction of PT Astra i.e., PT Astra and Medicure go up and down completely randomly.

Pair Corralation between PT Astra and Medicure

Assuming the 90 days horizon PT Astra International is expected to generate 1.55 times more return on investment than Medicure. However, PT Astra is 1.55 times more volatile than Medicure. It trades about 0.03 of its potential returns per unit of risk. Medicure is currently generating about -0.17 per unit of risk. If you would invest  27.00  in PT Astra International on December 29, 2024 and sell it today you would earn a total of  1.00  from holding PT Astra International or generate 3.7% return on investment over 90 days.

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

PT Astra International  vs.  Medicure

PT Astra International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, PT Astra may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Medicure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medicure 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 forward-looking indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PT Astra and Medicure

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

The idea behind PT Astra International and Medicure 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.