Correlation Between HF FOODS and Merit Medical
Can any of the company-specific risk be diversified away by investing in both HF FOODS 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 HF FOODS and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HF FOODS GRP and Merit Medical Systems, you can compare the effects of market volatilities on HF FOODS 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 HF FOODS with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Merit Medical.
Diversification Opportunities for HF FOODS and Merit Medical
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3GX and Merit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP 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 HF FOODS 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 HF FOODS GRP 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 HF FOODS i.e., HF FOODS and Merit Medical go up and down completely randomly.
Pair Corralation between HF FOODS and Merit Medical
Assuming the 90 days horizon HF FOODS GRP is expected to under-perform the Merit Medical. In addition to that, HF FOODS is 2.1 times more volatile than Merit Medical Systems. It trades about -0.16 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about -0.25 per unit of volatility. If you would invest 9,950 in Merit Medical Systems on September 24, 2024 and sell it today you would lose (700.00) from holding Merit Medical Systems or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. Merit Medical Systems
Performance |
| Timeline |
| HF FOODS GRP |
| Merit Medical Systems |
HF FOODS and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Merit Medical
The main advantage of trading using opposite HF FOODS and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS 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.| HF FOODS vs. Sysco | HF FOODS vs. Jernimo Martins SGPS | HF FOODS vs. JERONIMO MARTINS UNADR2 | HF FOODS vs. Performance Food Group |
| Merit Medical vs. HOCHSCHILD MINING | Merit Medical vs. Western Copper and | Merit Medical vs. GameStop Corp | Merit Medical vs. FUTURE GAMING GRP |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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