Correlation Between Medallion Bank and Sotherly Hotels
Can any of the company-specific risk be diversified away by investing in both Medallion Bank and Sotherly Hotels 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 Sotherly Hotels 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 Sotherly Hotels PR, you can compare the effects of market volatilities on Medallion Bank and Sotherly Hotels 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 Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Bank and Sotherly Hotels.
Diversification Opportunities for Medallion Bank and Sotherly Hotels
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medallion and Sotherly is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Bank PR and Sotherly Hotels PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels PR 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 Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels PR has no effect on the direction of Medallion Bank i.e., Medallion Bank and Sotherly Hotels go up and down completely randomly.
Pair Corralation between Medallion Bank and Sotherly Hotels
Assuming the 90 days horizon Medallion Bank is expected to generate 19.18 times less return on investment than Sotherly Hotels. But when comparing it to its historical volatility, Medallion Bank PR is 3.3 times less risky than Sotherly Hotels. It trades about 0.01 of its potential returns per unit of risk. Sotherly Hotels PR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,691 in Sotherly Hotels PR on October 20, 2024 and sell it today you would earn a total of 34.00 from holding Sotherly Hotels PR or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medallion Bank PR vs. Sotherly Hotels PR
Performance |
| Timeline |
| Medallion Bank PR |
| Sotherly Hotels PR |
Medallion Bank and Sotherly Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Bank and Sotherly Hotels
The main advantage of trading using opposite Medallion Bank and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Bank position performs unexpectedly, Sotherly Hotels 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 Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.| Medallion Bank vs. Medalist Diversified Reit | Medallion Bank vs. Northern Trust | Medallion Bank vs. First Citizens BancShares |
| Sotherly Hotels vs. Sotherly Hotels | Sotherly Hotels vs. Braemar Hotel Resorts | Sotherly Hotels vs. Summit Hotel Properties | Sotherly Hotels vs. Service Properties Trust |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |