Correlation Between Medallion Bank and China Lending
Can any of the company-specific risk be diversified away by investing in both Medallion Bank and China Lending 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 China Lending 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 China Lending Corp, you can compare the effects of market volatilities on Medallion Bank and China Lending 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 China Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Bank and China Lending.
Diversification Opportunities for Medallion Bank and China Lending
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medallion and China is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Bank PR and China Lending Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Lending Corp 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 China Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Lending Corp has no effect on the direction of Medallion Bank i.e., Medallion Bank and China Lending go up and down completely randomly.
Pair Corralation between Medallion Bank and China Lending
If you would invest 2,535 in Medallion Bank PR on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Medallion Bank PR or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Medallion Bank PR vs. China Lending Corp
Performance |
| Timeline |
| Medallion Bank PR |
| China Lending Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Medallion Bank and China Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Bank and China Lending
The main advantage of trading using opposite Medallion Bank and China Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Bank position performs unexpectedly, China Lending 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 China Lending will offset losses from the drop in China Lending'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 |
| China Lending vs. Qudian Inc | China Lending vs. X Financial Class | China Lending vs. FinVolution Group | China Lending vs. Senmiao Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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