Correlation Between Calmare Therapeutics and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Calmare Therapeutics 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 Calmare Therapeutics and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calmare Therapeutics and Merit Medical Systems, you can compare the effects of market volatilities on Calmare Therapeutics 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 Calmare Therapeutics with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calmare Therapeutics and Merit Medical.
Diversification Opportunities for Calmare Therapeutics and Merit Medical
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Calmare and Merit is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Calmare Therapeutics 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 Calmare Therapeutics 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 Calmare Therapeutics 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 Calmare Therapeutics i.e., Calmare Therapeutics and Merit Medical go up and down completely randomly.
Pair Corralation between Calmare Therapeutics and Merit Medical
If you would invest 6,404 in Merit Medical Systems on September 19, 2024 and sell it today you would earn a total of 3,309 from holding Merit Medical Systems or generate 51.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.34% |
| Values | Daily Returns |
Calmare Therapeutics vs. Merit Medical Systems
Performance |
| Timeline |
| Calmare Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Merit Medical Systems |
Calmare Therapeutics and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calmare Therapeutics and Merit Medical
The main advantage of trading using opposite Calmare Therapeutics and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calmare Therapeutics 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.| Calmare Therapeutics vs. BioNTech SE | Calmare Therapeutics vs. Teleflex Incorporated | Calmare Therapeutics vs. Modine Manufacturing | Calmare Therapeutics vs. U Power Limited |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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