Correlation Between AllianceBernstein and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and Medallion Financial 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 AllianceBernstein and Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AllianceBernstein Holding LP and Medallion Financial Corp, you can compare the effects of market volatilities on AllianceBernstein and Medallion Financial 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 AllianceBernstein with a short position of Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Medallion Financial.
Diversification Opportunities for AllianceBernstein and Medallion Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AllianceBernstein and Medallion is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Medallion Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Financial Corp and AllianceBernstein 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 AllianceBernstein Holding LP are associated (or correlated) with Medallion Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Financial Corp has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Medallion Financial go up and down completely randomly.
Pair Corralation between AllianceBernstein and Medallion Financial
Allowing for the 90-day total investment horizon AllianceBernstein Holding LP is expected to under-perform the Medallion Financial. But the stock apears to be less risky and, when comparing its historical volatility, AllianceBernstein Holding LP is 1.03 times less risky than Medallion Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Medallion Financial Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 890.00 in Medallion Financial Corp on August 24, 2024 and sell it today you would earn a total of 67.00 from holding Medallion Financial Corp or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AllianceBernstein Holding LP vs. Medallion Financial Corp
Performance |
| Timeline |
| AllianceBernstein |
| Medallion Financial Corp |
AllianceBernstein and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AllianceBernstein and Medallion Financial
The main advantage of trading using opposite AllianceBernstein and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBernstein position performs unexpectedly, Medallion Financial 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 Medallion Financial will offset losses from the drop in Medallion Financial's long position.| AllianceBernstein vs. Brightsphere Investment Group | AllianceBernstein vs. Affiliated Managers Group | AllianceBernstein vs. Bain Capital Specialty | AllianceBernstein vs. BlackRock Capital Allocation |
| Medallion Financial vs. Midland States Bancorp | Medallion Financial vs. Western New England | Medallion Financial vs. Merchants Bancorp | Medallion Financial vs. MidWestOne Financial Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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