Correlation Between World Acceptance and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both World Acceptance 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 World Acceptance and Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Acceptance and Medallion Financial Corp, you can compare the effects of market volatilities on World Acceptance 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 World Acceptance with a short position of Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Acceptance and Medallion Financial.
Diversification Opportunities for World Acceptance and Medallion Financial
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between World and Medallion is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding World Acceptance 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 World Acceptance 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 World Acceptance 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 World Acceptance i.e., World Acceptance and Medallion Financial go up and down completely randomly.
Pair Corralation between World Acceptance and Medallion Financial
Given the investment horizon of 90 days World Acceptance is expected to under-perform the Medallion Financial. In addition to that, World Acceptance is 1.29 times more volatile than Medallion Financial Corp. It trades about 0.0 of its total potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.07 per unit of volatility. If you would invest 813.00 in Medallion Financial Corp on August 24, 2024 and sell it today you would earn a total of 144.00 from holding Medallion Financial Corp or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Acceptance vs. Medallion Financial Corp
Performance |
| Timeline |
| World Acceptance |
| Medallion Financial Corp |
World Acceptance and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Acceptance and Medallion Financial
The main advantage of trading using opposite World Acceptance and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Acceptance 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.| World Acceptance vs. FirstCash | World Acceptance vs. Enova International | World Acceptance vs. Green Dot | World Acceptance vs. Medallion Financial Corp |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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