Correlation Between PT Astra and Acreage Holdings

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

Diversification Opportunities for PT Astra and Acreage Holdings

-0.48

Correlation Coefficient

PT Astra  Acreage Holdings

Very good diversification

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

Pair Corralation between PT Astra and Acreage Holdings

If you would invest  37.00  in PT Astra International on September 19, 2024 and sell it today you would earn a total of  0.00  from holding PT Astra International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	76.19%
Values	Daily Returns

PT Astra International  vs.  Acreage 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 weak forward indicators, PT Astra reported solid returns over the last few months and may actually be approaching a breakup point.

Acreage Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acreage Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile fundamental indicators, Acreage Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PT Astra and Acreage Holdings

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

The idea behind PT Astra International and Acreage 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.