Correlation Between Medallion Financial and Blackrock Multi

Can any of the company-specific risk be diversified away by investing in both Medallion Financial and Blackrock Multi 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 Blackrock Multi 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 Blackrock Multi Sector, you can compare the effects of market volatilities on Medallion Financial and Blackrock Multi 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 Blackrock Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medallion Financial and Blackrock Multi.

Diversification Opportunities for Medallion Financial and Blackrock Multi

-0.69

Correlation Coefficient

Medallion Financial  Blackrock Multi

Excellent diversification

The 3 months correlation between Medallion and Blackrock is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Medallion Financial Corp and Blackrock Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Multi Sector 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 Blackrock Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Multi Sector has no effect on the direction of Medallion Financial i.e., Medallion Financial and Blackrock Multi go up and down completely randomly.

Pair Corralation between Medallion Financial and Blackrock Multi

Given the investment horizon of 90 days Medallion Financial Corp is expected to under-perform the Blackrock Multi. In addition to that, Medallion Financial is 4.17 times more volatile than Blackrock Multi Sector. It trades about -0.04 of its total potential returns per unit of risk. Blackrock Multi Sector is currently generating about 0.11 per unit of volatility. If you would invest  1,401  in Blackrock Multi Sector on December 24, 2024 and sell it today you would earn a total of  48.00  from holding Blackrock Multi Sector or generate 3.43% return on investment over 90 days.

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

Medallion Financial Corp  vs.  Blackrock Multi Sector

Medallion Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medallion Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Medallion Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Blackrock Multi Sector

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Multi Sector are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Blackrock Multi is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Medallion Financial and Blackrock Multi

The main advantage of trading using opposite Medallion Financial and Blackrock Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medallion Financial position performs unexpectedly, Blackrock Multi 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 Blackrock Multi will offset losses from the drop in Blackrock Multi's long position.

The idea behind Medallion Financial Corp and Blackrock Multi Sector 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.