Correlation Between International Money and Option Care

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

Diversification Opportunities for International Money and Option Care

-0.64

Correlation Coefficient

International Money  Option Care

Excellent diversification

The 3 months correlation between International and Option is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding International Money Express and Option Care Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Option Care Health 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 Option Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Option Care Health has no effect on the direction of International Money i.e., International Money and Option Care go up and down completely randomly.

Pair Corralation between International Money and Option Care

Given the investment horizon of 90 days International Money Express is expected to generate 0.61 times more return on investment than Option Care. However, International Money Express is 1.65 times less risky than Option Care. It trades about 0.12 of its potential returns per unit of risk. Option Care Health is currently generating about -0.12 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.  Option Care Health

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.

Option Care Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Option Care Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with International Money and Option Care

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

The idea behind International Money Express and Option Care Health 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.