Correlation Between Workiva and MoneyLion

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

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

Diversification Opportunities for Workiva and MoneyLion

-0.79

Correlation Coefficient

Workiva  MoneyLion

Pay attention - limited upside

The 3 months correlation between Workiva and MoneyLion is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Workiva and MoneyLion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyLion and Workiva 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 Workiva 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 Workiva i.e., Workiva and MoneyLion go up and down completely randomly.

Pair Corralation between Workiva and MoneyLion

Allowing for the 90-day total investment horizon Workiva is expected to generate 0.4 times more return on investment than MoneyLion. However, Workiva is 2.51 times less risky than MoneyLion. It trades about -0.09 of its potential returns per unit of risk. MoneyLion is currently generating about -0.05 per unit of risk. If you would invest  8,233  in Workiva on January 24, 2024 and sell it today you would lose (324.00) from holding Workiva or give up 3.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Workiva  vs.  MoneyLion

Workiva

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Workiva has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional 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 inconsistent essential indicators, MoneyLion disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workiva and MoneyLion

The main advantage of trading using opposite Workiva and MoneyLion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workiva 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 Workiva 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.