Correlation Between Jeld Wen and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Jeld Wen 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 Jeld Wen and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and Merit Medical Systems, you can compare the effects of market volatilities on Jeld Wen 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 Jeld Wen with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Merit Medical.
Diversification Opportunities for Jeld Wen and Merit Medical
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jeld and Merit is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding 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 Jeld Wen 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 Jeld Wen Holding 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 Jeld Wen i.e., Jeld Wen and Merit Medical go up and down completely randomly.
Pair Corralation between Jeld Wen and Merit Medical
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Merit Medical. In addition to that, Jeld Wen is 6.32 times more volatile than Merit Medical Systems. It trades about -0.12 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.21 per unit of volatility. If you would invest 9,866 in Merit Medical Systems on September 1, 2024 and sell it today you would earn a total of 524.00 from holding Merit Medical Systems or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. Merit Medical Systems
Performance |
| Timeline |
| Jeld Wen Holding |
| Merit Medical Systems |
Jeld Wen and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and Merit Medical
The main advantage of trading using opposite Jeld Wen and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen 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.| Jeld Wen vs. Trex Company | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises | Jeld Wen vs. Travis Perkins PLC |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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