Correlation Between Haleon Plc and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Haleon Plc 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 Haleon Plc and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and Merit Medical Systems, you can compare the effects of market volatilities on Haleon Plc 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 Haleon Plc with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and Merit Medical.
Diversification Opportunities for Haleon Plc and Merit Medical
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haleon and Merit is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc 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 Haleon Plc 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 Haleon plc 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 Haleon Plc i.e., Haleon Plc and Merit Medical go up and down completely randomly.
Pair Corralation between Haleon Plc and Merit Medical
Considering the 90-day investment horizon Haleon plc is expected to under-perform the Merit Medical. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 1.44 times less risky than Merit Medical. The stock trades about -0.08 of its potential returns per unit of risk. The Merit Medical Systems is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 9,590 in Merit Medical Systems on August 30, 2024 and sell it today you would earn a total of 776.00 from holding Merit Medical Systems or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haleon plc vs. Merit Medical Systems
Performance |
| Timeline |
| Haleon plc |
| Merit Medical Systems |
Haleon Plc and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and Merit Medical
The main advantage of trading using opposite Haleon Plc and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc 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.| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
| Merit Medical vs. ReShape Lifesciences | Merit Medical vs. Bone Biologics Corp | Merit Medical vs. Tivic Health Systems | Merit Medical vs. Nuwellis |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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