Correlation Between Medallion Bank and Medalist Diversified
Can any of the company-specific risk be diversified away by investing in both Medallion Bank and Medalist Diversified 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 Medalist Diversified 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 Medalist Diversified Reit, you can compare the effects of market volatilities on Medallion Bank and Medalist Diversified 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 Medalist Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Bank and Medalist Diversified.
Diversification Opportunities for Medallion Bank and Medalist Diversified
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Medallion and Medalist is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Bank PR and Medalist Diversified Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medalist Diversified Reit 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 Medalist Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medalist Diversified Reit has no effect on the direction of Medallion Bank i.e., Medallion Bank and Medalist Diversified go up and down completely randomly.
Pair Corralation between Medallion Bank and Medalist Diversified
Assuming the 90 days horizon Medallion Bank is expected to generate 1.5 times less return on investment than Medalist Diversified. But when comparing it to its historical volatility, Medallion Bank PR is 1.96 times less risky than Medalist Diversified. It trades about 0.04 of its potential returns per unit of risk. Medalist Diversified Reit is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,074 in Medalist Diversified Reit on November 1, 2024 and sell it today you would earn a total of 437.00 from holding Medalist Diversified Reit or generate 21.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.73% |
| Values | Daily Returns |
Medallion Bank PR vs. Medalist Diversified Reit
Performance |
| Timeline |
| Medallion Bank PR |
| Medalist Diversified Reit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Medallion Bank and Medalist Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Bank and Medalist Diversified
The main advantage of trading using opposite Medallion Bank and Medalist Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Bank position performs unexpectedly, Medalist Diversified 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 Medalist Diversified will offset losses from the drop in Medalist Diversified's long position.The idea behind Medallion Bank PR and Medalist Diversified Reit 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.| Medalist Diversified vs. Medallion Bank PR | Medalist Diversified vs. Sotherly Hotels PR | Medalist Diversified vs. Sotherly Hotels Series |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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