Correlation Between MoneyLion and Olo

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

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

Diversification Opportunities for MoneyLion and Olo

-0.71

Correlation Coefficient

MoneyLion  Olo

Pay attention - limited upside

The 3 months correlation between MoneyLion and Olo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding MoneyLion and Olo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olo Inc 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 Olo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olo Inc has no effect on the direction of MoneyLion i.e., MoneyLion and Olo go up and down completely randomly.

Pair Corralation between MoneyLion and Olo

Allowing for the 90-day total investment horizon MoneyLion is expected to under-perform the Olo. In addition to that, MoneyLion is 1.58 times more volatile than Olo Inc. It trades about -0.23 of its total potential returns per unit of risk. Olo Inc is currently generating about -0.16 per unit of volatility. If you would invest  521.00  in Olo Inc on February 7, 2024 and sell it today you would lose (42.00) from holding Olo Inc or give up 8.06% of portfolio value over 90 days.

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

MoneyLion  vs.  Olo Inc

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.

Olo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Olo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with MoneyLion and Olo

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

The idea behind MoneyLion and Olo Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.