Correlation Between Flagship Investments and MoneyMe

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

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

Diversification Opportunities for Flagship Investments and MoneyMe

0.43

Correlation Coefficient

Flagship Investments  MoneyMe

Very weak diversification

The 3 months correlation between Flagship and MoneyMe is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and MoneyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyMe and Flagship Investments 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 Flagship Investments are associated (or correlated) with MoneyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyMe has no effect on the direction of Flagship Investments i.e., Flagship Investments and MoneyMe go up and down completely randomly.

Pair Corralation between Flagship Investments and MoneyMe

Assuming the 90 days trading horizon Flagship Investments is expected to generate 12.2 times less return on investment than MoneyMe. But when comparing it to its historical volatility, Flagship Investments is 5.16 times less risky than MoneyMe. It trades about 0.08 of its potential returns per unit of risk. MoneyMe is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  11.00  in MoneyMe on October 8, 2024 and sell it today you would earn a total of  10.00  from holding MoneyMe or generate 90.91% return on investment over 90 days.

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

Flagship Investments  vs.  MoneyMe

Flagship Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flagship Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Flagship Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MoneyMe

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyMe are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MoneyMe unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flagship Investments and MoneyMe

The main advantage of trading using opposite Flagship Investments and MoneyMe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, MoneyMe 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 MoneyMe will offset losses from the drop in MoneyMe's long position.

The idea behind Flagship Investments and MoneyMe 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.