Correlation Between Workiva and MoneyLion
Can any of the company-specific risk be diversified away by investing in both Workiva 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 Workiva and MoneyLion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workiva and MoneyLion, you can compare the effects of market volatilities on Workiva 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 Workiva with a short position of MoneyLion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workiva and MoneyLion.
Diversification Opportunities for Workiva and MoneyLion
Almost no diversification
The 3 months correlation between Workiva and MoneyLion is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and MoneyLion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyLion and Workiva 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 Workiva 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 Workiva i.e., Workiva and MoneyLion go up and down completely randomly.
Pair Corralation between Workiva and MoneyLion
Allowing for the 90-day total investment horizon Workiva is expected to generate 8.34 times less return on investment than MoneyLion. But when comparing it to its historical volatility, Workiva is 3.17 times less risky than MoneyLion. It trades about 0.03 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 |
Workiva vs. MoneyLion
Performance |
| Timeline |
| Workiva |
| MoneyLion |
Workiva and MoneyLion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workiva and MoneyLion
The main advantage of trading using opposite Workiva and MoneyLion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workiva 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.The idea behind Workiva and MoneyLion 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.| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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