Correlation Between Medallion Financial and FinVolution
Can any of the company-specific risk be diversified away by investing in both Medallion Financial and FinVolution 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 FinVolution 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 FinVolution Group, you can compare the effects of market volatilities on Medallion Financial and FinVolution 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 FinVolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Financial and FinVolution.
Diversification Opportunities for Medallion Financial and FinVolution
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medallion and FinVolution is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Financial Corp and FinVolution Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinVolution Group 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 FinVolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinVolution Group has no effect on the direction of Medallion Financial i.e., Medallion Financial and FinVolution go up and down completely randomly.
Pair Corralation between Medallion Financial and FinVolution
Given the investment horizon of 90 days Medallion Financial Corp is expected to generate 0.87 times more return on investment than FinVolution. However, Medallion Financial Corp is 1.14 times less risky than FinVolution. It trades about 0.11 of its potential returns per unit of risk. FinVolution Group is currently generating about 0.03 per unit of risk. If you would invest 909.00 in Medallion Financial Corp on August 27, 2024 and sell it today you would earn a total of 37.00 from holding Medallion Financial Corp or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medallion Financial Corp vs. FinVolution Group
Performance |
| Timeline |
| Medallion Financial Corp |
| FinVolution Group |
Medallion Financial and FinVolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Financial and FinVolution
The main advantage of trading using opposite Medallion Financial and FinVolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Financial position performs unexpectedly, FinVolution 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 FinVolution will offset losses from the drop in FinVolution'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 |
| FinVolution vs. SLM Corp | FinVolution vs. Orix Corp Ads | FinVolution vs. FirstCash | FinVolution 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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