Correlation Between CDL INVESTMENT and Merit Medical
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT 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 CDL INVESTMENT and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Merit Medical Systems, you can compare the effects of market volatilities on CDL INVESTMENT 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 CDL INVESTMENT with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Merit Medical.
Diversification Opportunities for CDL INVESTMENT and Merit Medical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between CDL and Merit is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT i.e., CDL INVESTMENT and Merit Medical go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and Merit Medical
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 2.88 times less return on investment than Merit Medical. In addition to that, CDL INVESTMENT is 1.36 times more volatile than Merit Medical Systems. It trades about 0.04 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.14 per unit of volatility. If you would invest 7,400 in Merit Medical Systems on September 1, 2024 and sell it today you would earn a total of 2,350 from holding Merit Medical Systems or generate 31.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. Merit Medical Systems
Performance |
| Timeline |
| CDL INVESTMENT |
| Merit Medical Systems |
CDL INVESTMENT and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and Merit Medical
The main advantage of trading using opposite CDL INVESTMENT and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT 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.| CDL INVESTMENT vs. SIVERS SEMICONDUCTORS AB | CDL INVESTMENT vs. Darden Restaurants | CDL INVESTMENT vs. Reliance Steel Aluminum | CDL INVESTMENT vs. Q2M Managementberatung AG |
| Merit Medical vs. Clean Energy Fuels | Merit Medical vs. Cardinal Health | Merit Medical vs. DiamondRock Hospitality | Merit Medical vs. Bumrungrad Hospital Public |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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