Correlation Between Dynatrace Holdings and MoneyLion

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

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

Diversification Opportunities for Dynatrace Holdings and MoneyLion

-0.74

Correlation Coefficient

Dynatrace Holdings  MoneyLion

Pay attention - limited upside

The 3 months correlation between Dynatrace and MoneyLion is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dynatrace Holdings LLC and MoneyLion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyLion and Dynatrace Holdings 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 Dynatrace Holdings LLC 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 Dynatrace Holdings i.e., Dynatrace Holdings and MoneyLion go up and down completely randomly.

Pair Corralation between Dynatrace Holdings and MoneyLion

Allowing for the 90-day total investment horizon Dynatrace Holdings LLC is expected to under-perform the MoneyLion. But the stock apears to be less risky and, when comparing its historical volatility, Dynatrace Holdings LLC is 3.34 times less risky than MoneyLion. The stock trades about -0.17 of its potential returns per unit of risk. The MoneyLion is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  4,883  in MoneyLion on January 26, 2024 and sell it today you would earn a total of  2,132  from holding MoneyLion or generate 43.66% return on investment over 90 days.

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

Dynatrace Holdings LLC  vs.  MoneyLion

Dynatrace Holdings LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dynatrace Holdings LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

MoneyLion

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyLion are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, MoneyLion disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dynatrace Holdings and MoneyLion

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

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.