Correlation Between NYSE Composite and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Medallion 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 NYSE Composite and Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Medallion Financial Corp, you can compare the effects of market volatilities on NYSE Composite and Medallion 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 NYSE Composite with a short position of Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Medallion Financial.
Diversification Opportunities for NYSE Composite and Medallion Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Medallion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Medallion Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Financial Corp and NYSE Composite 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 NYSE Composite are associated (or correlated) with Medallion Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Financial Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Medallion Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and Medallion Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.39 times more return on investment than Medallion Financial. However, NYSE Composite is 2.6 times less risky than Medallion Financial. It trades about 0.29 of its potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.05 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Medallion Financial Corp
Performance |
| Timeline |
NYSE Composite and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Medallion Financial Corp
Pair trading matchups for Medallion Financial
Pair Trading with NYSE Composite and Medallion Financial
The main advantage of trading using opposite NYSE Composite and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Medallion 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 Medallion Financial will offset losses from the drop in Medallion Financial's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Medallion Financial vs. Midland States Bancorp | Medallion Financial vs. Western New England | Medallion Financial vs. Merchants Bancorp | Medallion Financial vs. MidWestOne Financial Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |