Correlation Between CHINA TONTINE and Merit Medical
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE 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 CHINA TONTINE and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA TONTINE WINES and Merit Medical Systems, you can compare the effects of market volatilities on CHINA TONTINE 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 CHINA TONTINE with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and Merit Medical.
Diversification Opportunities for CHINA TONTINE and Merit Medical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Merit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES 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 CHINA TONTINE 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 CHINA TONTINE WINES 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 CHINA TONTINE i.e., CHINA TONTINE and Merit Medical go up and down completely randomly.
Pair Corralation between CHINA TONTINE and Merit Medical
Assuming the 90 days trading horizon CHINA TONTINE WINES is expected to generate 23.76 times more return on investment than Merit Medical. However, CHINA TONTINE is 23.76 times more volatile than Merit Medical Systems. It trades about 0.04 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.05 per unit of risk. If you would invest 0.70 in CHINA TONTINE WINES on August 30, 2024 and sell it today you would earn a total of 6.30 from holding CHINA TONTINE WINES or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA TONTINE WINES vs. Merit Medical Systems
Performance |
| Timeline |
| CHINA TONTINE WINES |
| Merit Medical Systems |
CHINA TONTINE and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and Merit Medical
The main advantage of trading using opposite CHINA TONTINE and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE 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.| CHINA TONTINE vs. SPORTING | CHINA TONTINE vs. X FAB Silicon Foundries | CHINA TONTINE vs. Transport International Holdings | CHINA TONTINE vs. MACOM Technology Solutions |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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