Correlation Between Broad Capital and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both Broad Capital 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 Broad Capital and Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broad Capital Acquisition and Medallion Financial Corp, you can compare the effects of market volatilities on Broad Capital 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 Broad Capital with a short position of Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and Medallion Financial.
Diversification Opportunities for Broad Capital and Medallion Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Broad and Medallion is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition 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 Broad Capital 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 Broad Capital Acquisition 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 Broad Capital i.e., Broad Capital and Medallion Financial go up and down completely randomly.
Pair Corralation between Broad Capital and Medallion Financial
Assuming the 90 days horizon Broad Capital is expected to generate 8.56 times less return on investment than Medallion Financial. But when comparing it to its historical volatility, Broad Capital Acquisition is 4.14 times less risky than Medallion Financial. It trades about 0.02 of its potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 649.00 in Medallion Financial Corp on August 31, 2024 and sell it today you would earn a total of 293.00 from holding Medallion Financial Corp or generate 45.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broad Capital Acquisition vs. Medallion Financial Corp
Performance |
| Timeline |
| Broad Capital Acquisition |
| Medallion Financial Corp |
Broad Capital and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broad Capital and Medallion Financial
The main advantage of trading using opposite Broad Capital and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broad Capital 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.| Broad Capital vs. Finnovate Acquisition Corp | Broad Capital vs. Welsbach Technology Metals | Broad Capital vs. Healthcare AI Acquisition | Broad Capital vs. Metal Sky Star |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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