Correlation Between Aegon NV and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Aegon NV 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 Aegon NV and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon NV ADR and Merit Medical Systems, you can compare the effects of market volatilities on Aegon NV 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 Aegon NV with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Merit Medical.
Diversification Opportunities for Aegon NV and Merit Medical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegon and Merit is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR 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 Aegon NV 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 Aegon NV ADR 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 Aegon NV i.e., Aegon NV and Merit Medical go up and down completely randomly.
Pair Corralation between Aegon NV and Merit Medical
Considering the 90-day investment horizon Aegon NV ADR is expected to under-perform the Merit Medical. In addition to that, Aegon NV is 1.01 times more volatile than Merit Medical Systems. It trades about -0.1 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.3 per unit of volatility. If you would invest 9,587 in Merit Medical Systems on August 25, 2024 and sell it today you would earn a total of 946.00 from holding Merit Medical Systems or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. Merit Medical Systems
Performance |
| Timeline |
| Aegon NV ADR |
| Merit Medical Systems |
Aegon NV and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Merit Medical
The main advantage of trading using opposite Aegon NV and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV 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.| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
| Merit Medical vs. Heartbeam | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Nutex Health | Merit Medical vs. Healthcare Triangle |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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