Correlation Between Expensify and MoneyLion

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

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

Diversification Opportunities for Expensify and MoneyLion

0.93

Correlation Coefficient

Expensify  MoneyLion

Almost no diversification

The 3 months correlation between Expensify and MoneyLion is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and MoneyLion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyLion and Expensify 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 Expensify 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 Expensify i.e., Expensify and MoneyLion go up and down completely randomly.

Pair Corralation between Expensify and MoneyLion

Given the investment horizon of 90 days Expensify is expected to under-perform the MoneyLion. But the stock apears to be less risky and, when comparing its historical volatility, Expensify is 1.17 times less risky than MoneyLion. The stock trades about -0.01 of its potential returns per unit of risk. The MoneyLion is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,493  in MoneyLion on October 4, 2024 and sell it today you would earn a total of  6,128  from holding MoneyLion or generate 245.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Expensify  vs.  MoneyLion

Expensify

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Expensify are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Expensify showed solid returns over the last few months and may actually be approaching a breakup point.

MoneyLion

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyLion are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, MoneyLion disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expensify and MoneyLion

The main advantage of trading using opposite Expensify and MoneyLion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expensify 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 Expensify 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.