Correlation Between Porch and MoneyLion

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

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

Diversification Opportunities for Porch and MoneyLion

0.58

Correlation Coefficient

Porch  MoneyLion

Very weak diversification

The 3 months correlation between Porch and MoneyLion is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Porch Group and MoneyLion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyLion and Porch 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 Porch Group 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 Porch i.e., Porch and MoneyLion go up and down completely randomly.

Pair Corralation between Porch and MoneyLion

Given the investment horizon of 90 days Porch Group is expected to under-perform the MoneyLion. In addition to that, Porch is 1.41 times more volatile than MoneyLion. It trades about -0.24 of its total potential returns per unit of risk. MoneyLion is currently generating about 0.17 per unit of volatility. If you would invest  7,245  in MoneyLion on February 13, 2024 and sell it today you would earn a total of  830.00  from holding MoneyLion or generate 11.46% return on investment over 90 days.

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

Porch Group  vs.  MoneyLion

Porch Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Porch Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, Porch may actually be approaching a critical reversion point that can send shares even higher in June 2024.

MoneyLion

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyLion are ranked lower than 13 (%) 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 Porch and MoneyLion

The main advantage of trading using opposite Porch and MoneyLion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Porch 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 Porch Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..