Correlation Between Medallion Financial and Green Dot
Can any of the company-specific risk be diversified away by investing in both Medallion Financial and Green Dot 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 Green Dot 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 Green Dot, you can compare the effects of market volatilities on Medallion Financial and Green Dot 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 Green Dot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Financial and Green Dot.
Diversification Opportunities for Medallion Financial and Green Dot
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Medallion and Green is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Financial Corp and Green Dot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Dot 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 Green Dot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Dot has no effect on the direction of Medallion Financial i.e., Medallion Financial and Green Dot go up and down completely randomly.
Pair Corralation between Medallion Financial and Green Dot
Given the investment horizon of 90 days Medallion Financial Corp is expected to generate 0.83 times more return on investment than Green Dot. However, Medallion Financial Corp is 1.2 times less risky than Green Dot. It trades about 0.04 of its potential returns per unit of risk. Green Dot is currently generating about -0.02 per unit of risk. If you would invest 675.00 in Medallion Financial Corp on August 24, 2024 and sell it today you would earn a total of 282.00 from holding Medallion Financial Corp or generate 41.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medallion Financial Corp vs. Green Dot
Performance |
| Timeline |
| Medallion Financial Corp |
| Green Dot |
Medallion Financial and Green Dot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Financial and Green Dot
The main advantage of trading using opposite Medallion Financial and Green Dot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Financial position performs unexpectedly, Green Dot 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 Green Dot will offset losses from the drop in Green Dot'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 |
| Green Dot vs. Small Cap Core | Green Dot vs. Morningstar Unconstrained Allocation | Green Dot vs. Mutual Of America | Green Dot vs. Ep Emerging Markets |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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