Correlation Between Intuitive Surgical and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Intuitive Surgical 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 Intuitive Surgical and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Surgical and Merit Medical Systems, you can compare the effects of market volatilities on Intuitive Surgical 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 Intuitive Surgical with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Surgical and Merit Medical.
Diversification Opportunities for Intuitive Surgical and Merit Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intuitive and Merit is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Surgical 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 Intuitive Surgical 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 Intuitive Surgical 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 Intuitive Surgical i.e., Intuitive Surgical and Merit Medical go up and down completely randomly.
Pair Corralation between Intuitive Surgical and Merit Medical
Given the investment horizon of 90 days Intuitive Surgical is expected to generate 1.31 times less return on investment than Merit Medical. In addition to that, Intuitive Surgical is 1.56 times more volatile than Merit Medical Systems. It trades about 0.24 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.49 per unit of volatility. If you would invest 9,607 in Merit Medical Systems on November 2, 2024 and sell it today you would earn a total of 1,422 from holding Merit Medical Systems or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Surgical vs. Merit Medical Systems
Performance |
| Timeline |
| Intuitive Surgical |
| Merit Medical Systems |
Intuitive Surgical and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Surgical and Merit Medical
The main advantage of trading using opposite Intuitive Surgical and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Surgical 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.| Intuitive Surgical vs. Repligen | Intuitive Surgical vs. ResMed Inc | Intuitive Surgical vs. Merit Medical Systems | Intuitive Surgical vs. ICU Medical |
| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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