Correlation Between Vertex and MoneyLion
Can any of the company-specific risk be diversified away by investing in both Vertex and MoneyLion 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 Vertex and MoneyLion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vertex and MoneyLion, you can compare the effects of market volatilities on Vertex and MoneyLion 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 Vertex with a short position of MoneyLion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertex and MoneyLion.
Diversification Opportunities for Vertex and MoneyLion
Almost no diversification
The 3 months correlation between Vertex and MoneyLion is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Vertex and MoneyLion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyLion and Vertex 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 Vertex are associated (or correlated) with MoneyLion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyLion has no effect on the direction of Vertex i.e., Vertex and MoneyLion go up and down completely randomly.
Pair Corralation between Vertex and MoneyLion
Given the investment horizon of 90 days Vertex is expected to generate 1.82 times less return on investment than MoneyLion. But when comparing it to its historical volatility, Vertex is 2.07 times less risky than MoneyLion. It trades about 0.09 of its potential returns per unit of risk. MoneyLion is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,680 in MoneyLion on August 30, 2024 and sell it today you would earn a total of 6,976 from holding MoneyLion or generate 415.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vertex vs. MoneyLion
Performance |
| Timeline |
| Vertex |
| MoneyLion |
Vertex and MoneyLion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertex and MoneyLion
The main advantage of trading using opposite Vertex and MoneyLion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertex position performs unexpectedly, MoneyLion 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 MoneyLion will offset losses from the drop in MoneyLion's long position.| Vertex vs. Expensify | Vertex vs. Clearwater Analytics Holdings | Vertex vs. Sprinklr | Vertex vs. Alkami Technology |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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