Correlation Between Runway Growth and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both Runway Growth 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 Runway Growth and Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Runway Growth Finance and Medallion Financial Corp, you can compare the effects of market volatilities on Runway Growth 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 Runway Growth with a short position of Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runway Growth and Medallion Financial.
Diversification Opportunities for Runway Growth and Medallion Financial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Runway and Medallion is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Runway Growth Finance 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 Runway Growth 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 Runway Growth Finance 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 Runway Growth i.e., Runway Growth and Medallion Financial go up and down completely randomly.
Pair Corralation between Runway Growth and Medallion Financial
Given the investment horizon of 90 days Runway Growth is expected to generate 3.35 times less return on investment than Medallion Financial. But when comparing it to its historical volatility, Runway Growth Finance is 1.75 times less risky than Medallion Financial. It trades about 0.03 of its potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 659.00 in Medallion Financial Corp on August 27, 2024 and sell it today you would earn a total of 297.00 from holding Medallion Financial Corp or generate 45.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runway Growth Finance vs. Medallion Financial Corp
Performance |
| Timeline |
| Runway Growth Finance |
| Medallion Financial Corp |
Runway Growth and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runway Growth and Medallion Financial
The main advantage of trading using opposite Runway Growth and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runway Growth 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.| Runway Growth vs. Barings BDC | Runway Growth vs. OneMain Holdings | Runway Growth vs. Navient Corp | Runway Growth vs. Federal Agricultural Mortgage |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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