Correlation Between Summit Materials and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Summit Materials 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 Summit Materials and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Merit Medical Systems, you can compare the effects of market volatilities on Summit Materials 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 Summit Materials with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Merit Medical.
Diversification Opportunities for Summit Materials and Merit Medical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and Merit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials 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 Summit Materials 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 Summit Materials 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 Summit Materials i.e., Summit Materials and Merit Medical go up and down completely randomly.
Pair Corralation between Summit Materials and Merit Medical
Assuming the 90 days trading horizon Summit Materials is expected to generate 0.72 times more return on investment than Merit Medical. However, Summit Materials is 1.38 times less risky than Merit Medical. It trades about 0.09 of its potential returns per unit of risk. Merit Medical Systems is currently generating about -0.32 per unit of risk. If you would invest 4,820 in Summit Materials on October 11, 2024 and sell it today you would earn a total of 60.00 from holding Summit Materials or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Summit Materials vs. Merit Medical Systems
Performance |
| Timeline |
| Summit Materials |
| Merit Medical Systems |
Summit Materials and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Merit Medical
The main advantage of trading using opposite Summit Materials and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials 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.| Summit Materials vs. UNIDOC HEALTH P | Summit Materials vs. Media and Games | Summit Materials vs. NIGHTINGALE HEALTH EO | Summit Materials vs. RCI Hospitality Holdings |
| Merit Medical vs. Townsquare Media | Merit Medical vs. Luckin Coffee | Merit Medical vs. Seven West Media | Merit Medical vs. PARKEN Sport Entertainment |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |