Correlation Between MoneyMe and Credit Clear

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

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

Diversification Opportunities for MoneyMe and Credit Clear

-0.36

Correlation Coefficient

MoneyMe  Credit Clear

Very good diversification

The 3 months correlation between MoneyMe and Credit is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MoneyMe and Credit Clear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Clear and MoneyMe 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 MoneyMe are associated (or correlated) with Credit Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Clear has no effect on the direction of MoneyMe i.e., MoneyMe and Credit Clear go up and down completely randomly.

Pair Corralation between MoneyMe and Credit Clear

Assuming the 90 days trading horizon MoneyMe is expected to under-perform the Credit Clear. In addition to that, MoneyMe is 2.23 times more volatile than Credit Clear. It trades about -0.29 of its total potential returns per unit of risk. Credit Clear is currently generating about -0.19 per unit of volatility. If you would invest  31.00  in Credit Clear on December 5, 2024 and sell it today you would lose (4.00) from holding Credit Clear or give up 12.9% of portfolio value over 90 days.

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

MoneyMe  vs.  Credit Clear

MoneyMe

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyMe are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MoneyMe may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Credit Clear

Risk-Adjusted Performance

Very Weak

Over the last 90 days Credit Clear has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MoneyMe and Credit Clear

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

The idea behind MoneyMe and Credit Clear 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.