Correlation Between Citi Trends and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Citi Trends 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 Citi Trends and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citi Trends and Merit Medical Systems, you can compare the effects of market volatilities on Citi Trends 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 Citi Trends with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citi Trends and Merit Medical.
Diversification Opportunities for Citi Trends and Merit Medical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citi and Merit is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citi Trends 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 Citi Trends 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 Citi Trends 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 Citi Trends i.e., Citi Trends and Merit Medical go up and down completely randomly.
Pair Corralation between Citi Trends and Merit Medical
Given the investment horizon of 90 days Citi Trends is expected to under-perform the Merit Medical. In addition to that, Citi Trends is 1.75 times more volatile than Merit Medical Systems. It trades about -0.11 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about -0.13 per unit of volatility. If you would invest 9,711 in Merit Medical Systems on January 9, 2025 and sell it today you would lose (863.00) from holding Merit Medical Systems or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citi Trends vs. Merit Medical Systems
Performance |
| Timeline |
| Citi Trends |
| Merit Medical Systems |
Citi Trends and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citi Trends and Merit Medical
The main advantage of trading using opposite Citi Trends and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citi Trends 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.| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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