Correlation Between Distoken Acquisition and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition 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 Distoken Acquisition and Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distoken Acquisition and Medallion Financial Corp, you can compare the effects of market volatilities on Distoken Acquisition 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 Distoken Acquisition with a short position of Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and Medallion Financial.
Diversification Opportunities for Distoken Acquisition and Medallion Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Distoken and Medallion is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Distoken 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 Distoken Acquisition 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 Distoken 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 Distoken Acquisition i.e., Distoken Acquisition and Medallion Financial go up and down completely randomly.
Pair Corralation between Distoken Acquisition and Medallion Financial
Given the investment horizon of 90 days Distoken Acquisition is expected to generate 1.76 times less return on investment than Medallion Financial. But when comparing it to its historical volatility, Distoken Acquisition is 3.74 times less risky than Medallion Financial. It trades about 0.24 of its potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Medallion Financial Corp on August 28, 2024 and sell it today you would earn a total of 37.00 from holding Medallion Financial Corp or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Distoken Acquisition vs. Medallion Financial Corp
Performance |
| Timeline |
| Distoken Acquisition |
| Medallion Financial Corp |
Distoken Acquisition and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distoken Acquisition and Medallion Financial
The main advantage of trading using opposite Distoken Acquisition and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition 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.| Distoken Acquisition vs. PowerUp Acquisition Corp | Distoken Acquisition vs. Aurora Innovation | Distoken Acquisition vs. HUMANA INC | Distoken Acquisition vs. Aquagold International |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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