Correlation Between Funko and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Funko 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 Funko and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and Merit Medical Systems, you can compare the effects of market volatilities on Funko 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 Funko with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and Merit Medical.
Diversification Opportunities for Funko and Merit Medical
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Funko and Merit is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc 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 Funko 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 Funko Inc 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 Funko i.e., Funko and Merit Medical go up and down completely randomly.
Pair Corralation between Funko and Merit Medical
Given the investment horizon of 90 days Funko Inc is expected to under-perform the Merit Medical. In addition to that, Funko is 2.2 times more volatile than Merit Medical Systems. It trades about -0.09 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.11 per unit of volatility. If you would invest 9,960 in Merit Medical Systems on August 25, 2024 and sell it today you would earn a total of 573.00 from holding Merit Medical Systems or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. Merit Medical Systems
Performance |
| Timeline |
| Funko Inc |
| Merit Medical Systems |
Funko and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and Merit Medical
The main advantage of trading using opposite Funko and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko 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.The idea behind Funko Inc and Merit Medical Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Merit Medical vs. Heartbeam | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Nutex Health | Merit Medical vs. Healthcare Triangle |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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