Correlation Between CNVISION MEDIA and Merit Medical
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA 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 CNVISION MEDIA and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and Merit Medical Systems, you can compare the effects of market volatilities on CNVISION MEDIA 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 CNVISION MEDIA with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and Merit Medical.
Diversification Opportunities for CNVISION MEDIA and Merit Medical
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNVISION and Merit is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA i.e., CNVISION MEDIA and Merit Medical go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and Merit Medical
Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 1.85 times more return on investment than Merit Medical. However, CNVISION MEDIA is 1.85 times more volatile than Merit Medical Systems. It trades about -0.01 of its potential returns per unit of risk. Merit Medical Systems is currently generating about -0.26 per unit of risk. If you would invest 5.65 in CNVISION MEDIA on October 13, 2024 and sell it today you would lose (0.05) from holding CNVISION MEDIA or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CNVISION MEDIA vs. Merit Medical Systems
Performance |
| Timeline |
| CNVISION MEDIA |
| Merit Medical Systems |
CNVISION MEDIA and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and Merit Medical
The main advantage of trading using opposite CNVISION MEDIA and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA 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.| CNVISION MEDIA vs. SALESFORCE INC CDR | CNVISION MEDIA vs. PACIFIC ONLINE | CNVISION MEDIA vs. CN MODERN DAIRY | CNVISION MEDIA vs. Cal Maine Foods |
| Merit Medical vs. Performance Food Group | Merit Medical vs. SQUIRREL MEDIA SA | Merit Medical vs. CNVISION MEDIA | Merit Medical vs. SENECA FOODS A |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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