Correlation Between Medallion Financial and X Financial
Can any of the company-specific risk be diversified away by investing in both Medallion Financial and X Financial 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 X Financial 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 X Financial Class, you can compare the effects of market volatilities on Medallion Financial and X Financial 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 X Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Financial and X Financial.
Diversification Opportunities for Medallion Financial and X Financial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medallion and XYF is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Financial Corp and X Financial Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Financial Class 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 X Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Financial Class has no effect on the direction of Medallion Financial i.e., Medallion Financial and X Financial go up and down completely randomly.
Pair Corralation between Medallion Financial and X Financial
Given the investment horizon of 90 days Medallion Financial Corp is expected to generate 0.92 times more return on investment than X Financial. However, Medallion Financial Corp is 1.08 times less risky than X Financial. It trades about 0.11 of its potential returns per unit of risk. X Financial Class is currently generating about -0.03 per unit of risk. If you would invest 909.00 in Medallion Financial Corp on August 28, 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. X Financial Class
Performance |
| Timeline |
| Medallion Financial Corp |
| X Financial Class |
Medallion Financial and X Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medallion Financial and X Financial
The main advantage of trading using opposite Medallion Financial and X Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Financial position performs unexpectedly, X Financial 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 X Financial will offset losses from the drop in X Financial'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 |
| X Financial vs. Orix Corp Ads | X Financial vs. Medallion Financial Corp | X Financial vs. Oportun Financial Corp | X Financial vs. SLM Corp Pb |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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