Correlation Between International Money and MicroAlgo

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

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

Diversification Opportunities for International Money and MicroAlgo

-0.63

Correlation Coefficient

International Money  MicroAlgo

Excellent diversification

The 3 months correlation between International and MicroAlgo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding International Money Express and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo and International Money 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 International Money Express are associated (or correlated) with MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of International Money i.e., International Money and MicroAlgo go up and down completely randomly.

Pair Corralation between International Money and MicroAlgo

Given the investment horizon of 90 days International Money Express is expected to generate 0.2 times more return on investment than MicroAlgo. However, International Money Express is 5.1 times less risky than MicroAlgo. It trades about 0.12 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.07 per unit of risk. If you would invest  1,813  in International Money Express on September 2, 2024 and sell it today you would earn a total of  294.00  from holding International Money Express or generate 16.22% return on investment over 90 days.

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

International Money Express  vs.  MicroAlgo

International Money

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Money Express are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, International Money demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MicroAlgo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with International Money and MicroAlgo

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

The idea behind International Money Express and MicroAlgo 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.