Correlation Between MoneyLion and Exela Technologies

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

By analyzing existing cross correlation between MoneyLion and Exela Technologies Preferred, you can compare the effects of market volatilities on MoneyLion and Exela Technologies 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 Exela Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MoneyLion and Exela Technologies.

Diversification Opportunities for MoneyLion and Exela Technologies

-0.63

Correlation Coefficient

MoneyLion  Exela Technologies

Excellent diversification

The 3 months correlation between MoneyLion and Exela is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding MoneyLion and Exela Technologies Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela Technologies 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 Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of MoneyLion i.e., MoneyLion and Exela Technologies go up and down completely randomly.

Pair Corralation between MoneyLion and Exela Technologies

Allowing for the 90-day total investment horizon MoneyLion is expected to generate 0.96 times more return on investment than Exela Technologies. However, MoneyLion is 1.04 times less risky than Exela Technologies. It trades about 0.23 of its potential returns per unit of risk. Exela Technologies Preferred is currently generating about -0.21 per unit of risk. If you would invest  4,118  in MoneyLion on September 12, 2024 and sell it today you would earn a total of  4,684  from holding MoneyLion or generate 113.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	70.31%
Values	Daily Returns

MoneyLion  vs.  Exela Technologies Preferred

MoneyLion

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyLion are ranked lower than 17 (%) 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.

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with MoneyLion and Exela Technologies

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

The idea behind MoneyLion and Exela Technologies Preferred 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.