Correlation Between Medalist Diversified and Air T

Can any of the company-specific risk be diversified away by investing in both Medalist Diversified and Air T 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 Medalist Diversified and Air T into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Medalist Diversified Reit and Air T Inc, you can compare the effects of market volatilities on Medalist Diversified and Air T 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 Medalist Diversified with a short position of Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medalist Diversified and Air T.

Diversification Opportunities for Medalist Diversified and Air T

0.45

Correlation Coefficient

Medalist Diversified  Air T

Very weak diversification

The 3 months correlation between Medalist and Air is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Medalist Diversified Reit and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc and Medalist Diversified 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 Medalist Diversified Reit are associated (or correlated) with Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of Medalist Diversified i.e., Medalist Diversified and Air T go up and down completely randomly.

Pair Corralation between Medalist Diversified and Air T

Assuming the 90 days horizon Medalist Diversified Reit is expected to generate 1.23 times more return on investment than Air T. However, Medalist Diversified is 1.23 times more volatile than Air T Inc. It trades about 0.04 of its potential returns per unit of risk. Air T Inc is currently generating about 0.04 per unit of risk. If you would invest  2,330  in Medalist Diversified Reit on October 13, 2024 and sell it today you would earn a total of  181.00  from holding Medalist Diversified Reit or generate 7.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Medalist Diversified Reit  vs.  Air T Inc

Medalist Diversified Reit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medalist Diversified Reit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Medalist Diversified is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Air T Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Air T Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Air T is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Medalist Diversified and Air T

The main advantage of trading using opposite Medalist Diversified and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medalist Diversified position performs unexpectedly, Air T 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 Air T will offset losses from the drop in Air T's long position.

The idea behind Medalist Diversified Reit and Air T Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.