Correlation Between Medallion Financial and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Medallion Financial and Barings BDC 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 Barings BDC 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 Barings BDC, you can compare the effects of market volatilities on Medallion Financial and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Financial and Barings BDC.
Diversification Opportunities for Medallion Financial and Barings BDC
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medallion and Barings is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Financial Corp and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Medallion Financial i.e., Medallion Financial and Barings BDC go up and down completely randomly.
Pair Corralation between Medallion Financial and Barings BDC
Given the investment horizon of 90 days Medallion Financial Corp is expected to generate 2.24 times more return on investment than Barings BDC. However, Medallion Financial is 2.24 times more volatile than Barings BDC. It trades about 0.02 of its potential returns per unit of risk. Barings BDC is currently generating about 0.03 per unit of risk. If you would invest 764.00 in Medallion Financial Corp on February 23, 2024 and sell it today you would earn a total of 29.00 from holding Medallion Financial Corp or generate 3.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Medallion Financial Corp vs. Barings BDC
Performance |
Timeline |
Medallion Financial Corp |
Barings BDC |
Medallion Financial and Barings BDC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Medallion Financial and Barings BDC
The main advantage of trading using opposite Medallion Financial and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Financial position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.Medallion Financial vs. Pfizer Inc | Medallion Financial vs. Nutrien | Medallion Financial vs. Melco Resorts Entertainment | Medallion Financial vs. Sandstorm Gold Ltd |
Barings BDC vs. Pfizer Inc | Barings BDC vs. Nutrien | Barings BDC vs. Melco Resorts Entertainment | Barings BDC vs. Sandstorm Gold Ltd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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