Correlation Between Hasbro and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Hasbro 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 Hasbro and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Merit Medical Systems, you can compare the effects of market volatilities on Hasbro 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 Hasbro with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Merit Medical.
Diversification Opportunities for Hasbro and Merit Medical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hasbro and Merit is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro 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 Hasbro 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 Hasbro 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 Hasbro i.e., Hasbro and Merit Medical go up and down completely randomly.
Pair Corralation between Hasbro and Merit Medical
Considering the 90-day investment horizon Hasbro Inc is expected to under-perform the Merit Medical. In addition to that, Hasbro is 1.24 times more volatile than Merit Medical Systems. It trades about -0.16 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.12 per unit of volatility. If you would invest 9,883 in Merit Medical Systems on August 29, 2024 and sell it today you would earn a total of 629.50 from holding Merit Medical Systems or generate 6.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hasbro Inc vs. Merit Medical Systems
Performance |
| Timeline |
| Hasbro Inc |
| Merit Medical Systems |
Hasbro and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and Merit Medical
The main advantage of trading using opposite Hasbro and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro 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 Hasbro 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. Femasys | Merit Medical vs. Sharps Technology Warrant | Merit Medical vs. GlucoTrack | Merit Medical vs. Walt Disney |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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