Correlation Between Hollywood Bowl and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Merit Medical 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 Hollywood Bowl and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hollywood Bowl Group and Merit Medical Systems, you can compare the effects of market volatilities on Hollywood Bowl and Merit Medical 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 Hollywood Bowl with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Merit Medical.
Diversification Opportunities for Hollywood Bowl and Merit Medical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hollywood and Merit is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Merit Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merit Medical Systems and Hollywood Bowl 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 Hollywood Bowl Group are associated (or correlated) with Merit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merit Medical Systems has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Merit Medical go up and down completely randomly.
Pair Corralation between Hollywood Bowl and Merit Medical
Assuming the 90 days horizon Hollywood Bowl is expected to generate 10.43 times less return on investment than Merit Medical. In addition to that, Hollywood Bowl is 1.35 times more volatile than Merit Medical Systems. It trades about 0.01 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.09 per unit of volatility. If you would invest 7,450 in Merit Medical Systems on September 24, 2024 and sell it today you would earn a total of 1,650 from holding Merit Medical Systems or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hollywood Bowl Group vs. Merit Medical Systems
Performance |
| Timeline |
| Hollywood Bowl Group |
| Merit Medical Systems |
Hollywood Bowl and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hollywood Bowl and Merit Medical
The main advantage of trading using opposite Hollywood Bowl and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollywood Bowl position performs unexpectedly, Merit Medical 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 Merit Medical will offset losses from the drop in Merit Medical's long position.| Hollywood Bowl vs. Booking Holdings | Hollywood Bowl vs. ANTA Sports Products | Hollywood Bowl vs. Li Ning Company | Hollywood Bowl vs. Trip Group Limited |
| Merit Medical vs. Sunny Optical Technology | Merit Medical vs. Hollywood Bowl Group | Merit Medical vs. Amkor Technology | Merit Medical vs. SMA Solar Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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