Correlation Between MoneyLion and Aware

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Can any of the company-specific risk be diversified away by investing in both MoneyLion and Aware 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 MoneyLion and Aware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MoneyLion and Aware Inc, you can compare the effects of market volatilities on MoneyLion and Aware 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 MoneyLion with a short position of Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of MoneyLion and Aware.

Diversification Opportunities for MoneyLion and Aware

MoneyLionAwareDiversified AwayMoneyLionAwareDiversified Away100%
0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between MoneyLion and Aware is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MoneyLion and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and MoneyLion 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 MoneyLion are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of MoneyLion i.e., MoneyLion and Aware go up and down completely randomly.

Pair Corralation between MoneyLion and Aware

Allowing for the 90-day total investment horizon MoneyLion is expected to generate 1.49 times more return on investment than Aware. However, MoneyLion is 1.49 times more volatile than Aware Inc. It trades about 0.08 of its potential returns per unit of risk. Aware Inc is currently generating about 0.02 per unit of risk. If you would invest  2,013  in MoneyLion on November 27, 2024 and sell it today you would earn a total of  6,537  from holding MoneyLion or generate 324.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

MoneyLion  vs.  Aware Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15ML AWRE
       Timeline  
MoneyLion 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days MoneyLion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, MoneyLion is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7880828486889092
Aware Inc 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aware Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Aware is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.41.51.61.71.81.9

MoneyLion and Aware Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.21-6.9-4.58-2.270.02.34.677.059.4211.8 0.0200.0250.0300.0350.0400.045
JavaScript chart by amCharts 3.21.15ML AWRE
       Returns  

Pair Trading with MoneyLion and Aware

The main advantage of trading using opposite MoneyLion and Aware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoneyLion position performs unexpectedly, Aware 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 Aware will offset losses from the drop in Aware's long position.
The idea behind MoneyLion and Aware Inc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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