Correlation Between MoneyLion and Porch
Can any of the company-specific risk be diversified away by investing in both MoneyLion and Porch 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 Porch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MoneyLion and Porch Group, you can compare the effects of market volatilities on MoneyLion and Porch 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 Porch. Check out your portfolio center. Please also check ongoing floating volatility patterns of MoneyLion and Porch.
Diversification Opportunities for MoneyLion and Porch
Poor diversification
The 3 months correlation between MoneyLion and Porch is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MoneyLion and Porch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porch Group 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 Porch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porch Group has no effect on the direction of MoneyLion i.e., MoneyLion and Porch go up and down completely randomly.
Pair Corralation between MoneyLion and Porch
Allowing for the 90-day total investment horizon MoneyLion is expected to generate 1.4 times less return on investment than Porch. But when comparing it to its historical volatility, MoneyLion is 2.06 times less risky than Porch. It trades about 0.23 of its potential returns per unit of risk. Porch Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 203.00 in Porch Group on November 2, 2024 and sell it today you would earn a total of 227.00 from holding Porch Group or generate 111.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MoneyLion vs. Porch Group
Performance |
| Timeline |
| MoneyLion |
| Porch Group |
MoneyLion and Porch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MoneyLion and Porch
The main advantage of trading using opposite MoneyLion and Porch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoneyLion position performs unexpectedly, Porch 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 Porch will offset losses from the drop in Porch's long position.| MoneyLion vs. Porch Group | MoneyLion vs. Nerdy Inc | MoneyLion vs. Wag Group Co | MoneyLion vs. Dave Warrants |
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 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.
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