Correlation Between International Money and Sims

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

Diversification Opportunities for International Money and Sims

-0.52

Correlation Coefficient

International Money  Sims

Excellent diversification

The 3 months correlation between International and Sims is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding International Money Express and Sims Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims Limited 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 Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims Limited has no effect on the direction of International Money i.e., International Money and Sims go up and down completely randomly.

Pair Corralation between International Money and Sims

Given the investment horizon of 90 days International Money Express is expected to generate 1.03 times more return on investment than Sims. However, International Money is 1.03 times more volatile than Sims Limited. It trades about 0.13 of its potential returns per unit of risk. Sims Limited is currently generating about 0.02 per unit of risk. If you would invest  1,620  in International Money Express on January 25, 2024 and sell it today you would earn a total of  595.00  from holding International Money Express or generate 36.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

International Money Express  vs.  Sims Limited

International Money

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in International Money Express are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, International Money is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Sims Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sims Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with International Money and Sims

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

The idea behind International Money Express and Sims Limited 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.