Correlation Between Electrovaya Common and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Electrovaya Common 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 Electrovaya Common and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and Merit Medical Systems, you can compare the effects of market volatilities on Electrovaya Common 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 Electrovaya Common with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Merit Medical.
Diversification Opportunities for Electrovaya Common and Merit Medical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electrovaya and Merit is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares 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 Electrovaya Common 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 Electrovaya Common Shares 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 Electrovaya Common i.e., Electrovaya Common and Merit Medical go up and down completely randomly.
Pair Corralation between Electrovaya Common and Merit Medical
Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 3.95 times more return on investment than Merit Medical. However, Electrovaya Common is 3.95 times more volatile than Merit Medical Systems. It trades about 0.27 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.23 per unit of risk. If you would invest 210.00 in Electrovaya Common Shares on September 3, 2024 and sell it today you would earn a total of 58.00 from holding Electrovaya Common Shares or generate 27.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrovaya Common Shares vs. Merit Medical Systems
Performance |
| Timeline |
| Electrovaya Common Shares |
| Merit Medical Systems |
Electrovaya Common and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrovaya Common and Merit Medical
The main advantage of trading using opposite Electrovaya Common and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common 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.| Electrovaya Common vs. Bloom Energy Corp | Electrovaya Common vs. Elong Power Holding | Electrovaya Common vs. Enovix Corp | Electrovaya Common vs. Sunrise New Energy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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