Correlation Between Western New and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both Western New 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 Western New and Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western New England and Medallion Financial Corp, you can compare the effects of market volatilities on Western New 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 Western New with a short position of Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western New and Medallion Financial.
Diversification Opportunities for Western New and Medallion Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Medallion is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Western New England 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 Western New 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 Western New England 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 Western New i.e., Western New and Medallion Financial go up and down completely randomly.
Pair Corralation between Western New and Medallion Financial
Given the investment horizon of 90 days Western New England is expected to generate 0.78 times more return on investment than Medallion Financial. However, Western New England is 1.28 times less risky than Medallion Financial. It trades about 0.33 of its potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.11 per unit of risk. If you would invest 863.00 in Western New England on August 27, 2024 and sell it today you would earn a total of 87.00 from holding Western New England or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western New England vs. Medallion Financial Corp
Performance |
| Timeline |
| Western New England |
| Medallion Financial Corp |
Western New and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western New and Medallion Financial
The main advantage of trading using opposite Western New and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western New 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.| Western New vs. Fifth Third Bancorp | Western New vs. Zions Bancorporation | Western New vs. Huntington Bancshares Incorporated | Western New vs. Comerica |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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