Correlation Between J+J SNACK and Merit Medical
Can any of the company-specific risk be diversified away by investing in both J+J SNACK 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 J+J SNACK and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JJ SNACK FOODS and Merit Medical Systems, you can compare the effects of market volatilities on J+J SNACK 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 J+J SNACK with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of J+J SNACK and Merit Medical.
Diversification Opportunities for J+J SNACK and Merit Medical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between J+J and Merit is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding JJ SNACK FOODS 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 J+J SNACK 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 JJ SNACK FOODS 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 J+J SNACK i.e., J+J SNACK and Merit Medical go up and down completely randomly.
Pair Corralation between J+J SNACK and Merit Medical
Assuming the 90 days trading horizon JJ SNACK FOODS is expected to under-perform the Merit Medical. In addition to that, J+J SNACK is 1.04 times more volatile than Merit Medical Systems. It trades about -0.58 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about -0.45 per unit of volatility. If you would invest 9,950 in Merit Medical Systems on October 12, 2024 and sell it today you would lose (800.00) from holding Merit Medical Systems or give up 8.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JJ SNACK FOODS vs. Merit Medical Systems
Performance |
| Timeline |
| JJ SNACK FOODS |
| Merit Medical Systems |
J+J SNACK and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J+J SNACK and Merit Medical
The main advantage of trading using opposite J+J SNACK and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J+J SNACK 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.| J+J SNACK vs. Townsquare Media | J+J SNACK vs. Commonwealth Bank of | J+J SNACK vs. SUN LIFE FINANCIAL | J+J SNACK vs. CanSino Biologics |
| Merit Medical vs. Addus HomeCare | Merit Medical vs. OFFICE DEPOT | Merit Medical vs. Take Two Interactive Software | Merit Medical vs. Aedas Homes SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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