Correlation Between Taoping and International Money

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

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

Diversification Opportunities for Taoping and International Money

-0.62

Correlation Coefficient

Taoping  International Money

Excellent diversification

The 3 months correlation between Taoping and International is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Taoping and International Money Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Money and Taoping 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 Taoping are associated (or correlated) with International Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Money has no effect on the direction of Taoping i.e., Taoping and International Money go up and down completely randomly.

Pair Corralation between Taoping and International Money

Given the investment horizon of 90 days Taoping is expected to under-perform the International Money. In addition to that, Taoping is 3.75 times more volatile than International Money Express. It trades about -0.05 of its total potential returns per unit of risk. International Money Express is currently generating about 0.12 per unit of volatility. If you would invest  1,813  in International Money Express on September 1, 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

Taoping  vs.  International Money Express

Taoping

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taoping has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Taoping and International Money

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

The idea behind Taoping and International Money Express 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.