Correlation Between Medallion Financial and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Medallion Financial and Senmiao Technology 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 Financial and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medallion Financial Corp and Senmiao Technology, you can compare the effects of market volatilities on Medallion Financial and Senmiao Technology 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 Financial with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Financial and Senmiao Technology.
Diversification Opportunities for Medallion Financial and Senmiao Technology
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Medallion and Senmiao is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Financial Corp and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Medallion Financial 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 Financial Corp are associated (or correlated) with Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of Medallion Financial i.e., Medallion Financial and Senmiao Technology go up and down completely randomly.
Pair Corralation between Medallion Financial and Senmiao Technology
Given the investment horizon of 90 days Medallion Financial Corp is expected to generate 0.35 times more return on investment than Senmiao Technology. However, Medallion Financial Corp is 2.89 times less risky than Senmiao Technology. It trades about 0.2 of its potential returns per unit of risk. Senmiao Technology is currently generating about -0.07 per unit of risk. If you would invest 791.00 in Medallion Financial Corp on August 25, 2024 and sell it today you would earn a total of 165.00 from holding Medallion Financial Corp or generate 20.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Medallion Financial Corp vs. Senmiao Technology
Performance |
| Timeline |
| Medallion Financial Corp |
| Senmiao Technology |
Medallion Financial and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Financial and Senmiao Technology
The main advantage of trading using opposite Medallion Financial and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Financial position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.| Medallion Financial vs. Midland States Bancorp | Medallion Financial vs. Western New England | Medallion Financial vs. Merchants Bancorp | Medallion Financial vs. MidWestOne Financial Group |
| Senmiao Technology vs. SLM Corp | Senmiao Technology vs. Orix Corp Ads | Senmiao Technology vs. FirstCash | Senmiao Technology vs. Medallion Financial Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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