Correlation Between Medallion Bank and Capital One
Can any of the company-specific risk be diversified away by investing in both Medallion Bank and Capital One 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 Medallion Bank and Capital One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medallion Bank PR and Capital One Financial, you can compare the effects of market volatilities on Medallion Bank and Capital One 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 Medallion Bank with a short position of Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Bank and Capital One.
Diversification Opportunities for Medallion Bank and Capital One
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medallion and Capital is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Bank PR and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial and Medallion Bank 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 Medallion Bank PR are associated (or correlated) with Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of Medallion Bank i.e., Medallion Bank and Capital One go up and down completely randomly.
Pair Corralation between Medallion Bank and Capital One
Assuming the 90 days horizon Medallion Bank PR is expected to generate 1.06 times more return on investment than Capital One. However, Medallion Bank is 1.06 times more volatile than Capital One Financial. It trades about 0.13 of its potential returns per unit of risk. Capital One Financial is currently generating about -0.07 per unit of risk. If you would invest 2,460 in Medallion Bank PR on August 30, 2024 and sell it today you would earn a total of 140.00 from holding Medallion Bank PR or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medallion Bank PR vs. Capital One Financial
Performance |
| Timeline |
| Medallion Bank PR |
| Capital One Financial |
Medallion Bank and Capital One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Bank and Capital One
The main advantage of trading using opposite Medallion Bank and Capital One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Bank position performs unexpectedly, Capital One 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 Capital One will offset losses from the drop in Capital One's long position.| Medallion Bank vs. Merchants Bancorp | Medallion Bank vs. Medalist Diversified Reit | Medallion Bank vs. Northern Trust | Medallion Bank vs. First Citizens BancShares |
| Capital One vs. Capital One Financial | Capital One vs. Citizens Financial Group | Capital One vs. Wells Fargo | Capital One vs. Equitable Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |