Correlation Between MoneyLion and Blackline

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

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

Diversification Opportunities for MoneyLion and Blackline

-0.62

Correlation Coefficient

MoneyLion  Blackline

Excellent diversification

The 3 months correlation between MoneyLion and Blackline is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MoneyLion and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline 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 Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of MoneyLion i.e., MoneyLion and Blackline go up and down completely randomly.

Pair Corralation between MoneyLion and Blackline

Allowing for the 90-day total investment horizon MoneyLion is expected to generate 2.38 times more return on investment than Blackline. However, MoneyLion is 2.38 times more volatile than Blackline. It trades about 0.04 of its potential returns per unit of risk. Blackline is currently generating about 0.0 per unit of risk. If you would invest  2,871  in MoneyLion on June 24, 2024 and sell it today you would earn a total of  1,477  from holding MoneyLion or generate 51.45% return on investment over 90 days.

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

MoneyLion  vs.  Blackline

MoneyLion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MoneyLion 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 essential indicators remain quite persistent which may send shares a bit higher in October 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Blackline

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pair Trading with MoneyLion and Blackline

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

The idea behind MoneyLion and Blackline 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.