Correlation Between DevEx Resources and Merit Medical
Can any of the company-specific risk be diversified away by investing in both DevEx Resources 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 DevEx Resources and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DevEx Resources Limited and Merit Medical Systems, you can compare the effects of market volatilities on DevEx Resources 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 DevEx Resources with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DevEx Resources and Merit Medical.
Diversification Opportunities for DevEx Resources and Merit Medical
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DevEx and Merit is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding DevEx Resources Limited 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 DevEx Resources 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 DevEx Resources Limited 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 DevEx Resources i.e., DevEx Resources and Merit Medical go up and down completely randomly.
Pair Corralation between DevEx Resources and Merit Medical
Assuming the 90 days horizon DevEx Resources Limited is expected to under-perform the Merit Medical. In addition to that, DevEx Resources is 4.41 times more volatile than Merit Medical Systems. It trades about -0.02 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.24 per unit of volatility. If you would invest 8,700 in Merit Medical Systems on August 29, 2024 and sell it today you would earn a total of 1,050 from holding Merit Medical Systems or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DevEx Resources Limited vs. Merit Medical Systems
Performance |
| Timeline |
| DevEx Resources |
| Merit Medical Systems |
DevEx Resources and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DevEx Resources and Merit Medical
The main advantage of trading using opposite DevEx Resources and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DevEx Resources 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.| DevEx Resources vs. AEGEAN AIRLINES | DevEx Resources vs. Salesforce | DevEx Resources vs. SIDETRADE EO 1 | DevEx Resources vs. Vastned Retail NV |
| Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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