Correlation Between Medallion Financial and Runway Growth
Can any of the company-specific risk be diversified away by investing in both Medallion Financial and Runway Growth 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 Runway Growth 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 Runway Growth Finance, you can compare the effects of market volatilities on Medallion Financial and Runway Growth 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 Runway Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Financial and Runway Growth.
Diversification Opportunities for Medallion Financial and Runway Growth
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medallion and Runway is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Financial Corp and Runway Growth Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runway Growth Finance 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 Runway Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runway Growth Finance has no effect on the direction of Medallion Financial i.e., Medallion Financial and Runway Growth go up and down completely randomly.
Pair Corralation between Medallion Financial and Runway Growth
Given the investment horizon of 90 days Medallion Financial is expected to generate 1.32 times less return on investment than Runway Growth. In addition to that, Medallion Financial is 1.61 times more volatile than Runway Growth Finance. It trades about 0.17 of its total potential returns per unit of risk. Runway Growth Finance is currently generating about 0.35 per unit of volatility. If you would invest 1,001 in Runway Growth Finance on September 16, 2024 and sell it today you would earn a total of 90.00 from holding Runway Growth Finance or generate 8.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Medallion Financial Corp vs. Runway Growth Finance
Performance |
Timeline |
Medallion Financial Corp |
Runway Growth Finance |
Medallion Financial and Runway Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Medallion Financial and Runway Growth
The main advantage of trading using opposite Medallion Financial and Runway Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Financial position performs unexpectedly, Runway Growth 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 Runway Growth will offset losses from the drop in Runway Growth's long position.Medallion Financial vs. Visa Class A | Medallion Financial vs. PayPal Holdings | Medallion Financial vs. Upstart Holdings | Medallion Financial vs. Mastercard |
Runway Growth vs. Visa Class A | Runway Growth vs. Diamond Hill Investment | Runway Growth vs. AllianceBernstein Holding LP | Runway Growth vs. Deutsche Bank AG |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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