Correlation Between Integral and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Integral 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 Integral and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Ad Science and Merit Medical Systems, you can compare the effects of market volatilities on Integral 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 Integral with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Merit Medical.
Diversification Opportunities for Integral and Merit Medical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Integral and Merit is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science 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 Integral 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 Integral Ad Science 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 Integral i.e., Integral and Merit Medical go up and down completely randomly.
Pair Corralation between Integral and Merit Medical
Considering the 90-day investment horizon Integral Ad Science is expected to generate 2.16 times more return on investment than Merit Medical. However, Integral is 2.16 times more volatile than Merit Medical Systems. It trades about 0.03 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.05 per unit of risk. If you would invest 940.00 in Integral Ad Science on September 3, 2024 and sell it today you would earn a total of 214.00 from holding Integral Ad Science or generate 22.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integral Ad Science vs. Merit Medical Systems
Performance |
| Timeline |
| Integral Ad Science |
| Merit Medical Systems |
Integral and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and Merit Medical
The main advantage of trading using opposite Integral and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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