Correlation Between Inflection Point and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and Merit Medical Systems, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Merit Medical.
Diversification Opportunities for Inflection Point and Merit Medical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inflection and Merit is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition 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 Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and Merit Medical go up and down completely randomly.
Pair Corralation between Inflection Point and Merit Medical
Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 31.38 times more return on investment than Merit Medical. However, Inflection Point is 31.38 times more volatile than Merit Medical Systems. It trades about 0.05 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 0.00 in Inflection Point Acquisition on September 3, 2024 and sell it today you would earn a total of 1,100 from holding Inflection Point Acquisition or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.58% |
| Values | Daily Returns |
Inflection Point Acquisition vs. Merit Medical Systems
Performance |
| Timeline |
| Inflection Point Acq |
| Merit Medical Systems |
Inflection Point and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and Merit Medical
The main advantage of trading using opposite Inflection Point and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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.| Inflection Point vs. Arrow Electronics | Inflection Point vs. BioNTech SE | Inflection Point vs. BJs Restaurants | Inflection Point vs. Yum Brands |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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