Correlation Between MoneyLion and Unity Software

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

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

Diversification Opportunities for MoneyLion and Unity Software

0.45

Correlation Coefficient

MoneyLion  Unity Software

Very weak diversification

The 3 months correlation between MoneyLion and Unity is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MoneyLion and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software 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 Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of MoneyLion i.e., MoneyLion and Unity Software go up and down completely randomly.

Pair Corralation between MoneyLion and Unity Software

Allowing for the 90-day total investment horizon MoneyLion is expected to generate 1.09 times less return on investment than Unity Software. In addition to that, MoneyLion is 1.45 times more volatile than Unity Software. It trades about 0.06 of its total potential returns per unit of risk. Unity Software is currently generating about 0.09 per unit of volatility. If you would invest  1,601  in Unity Software on September 30, 2024 and sell it today you would earn a total of  683.00  from holding Unity Software or generate 42.66% return on investment over 90 days.

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

MoneyLion  vs.  Unity Software

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 fragile essential indicators, MoneyLion disclosed solid returns over the last few months and may actually be approaching a breakup point.

Unity Software

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Unity Software is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MoneyLion and Unity Software

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

The idea behind MoneyLion and Unity Software 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.