Correlation Between Joint Corp and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Joint Corp 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 Joint Corp and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Joint Corp and Merit Medical Systems, you can compare the effects of market volatilities on Joint Corp 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 Joint Corp with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Corp and Merit Medical.
Diversification Opportunities for Joint Corp and Merit Medical
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Joint and Merit is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Joint Corp 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 Joint Corp 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 The Joint Corp 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 Joint Corp i.e., Joint Corp and Merit Medical go up and down completely randomly.
Pair Corralation between Joint Corp and Merit Medical
Given the investment horizon of 90 days Joint Corp is expected to generate 5.08 times less return on investment than Merit Medical. In addition to that, Joint Corp is 2.35 times more volatile than Merit Medical Systems. It trades about 0.01 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.08 per unit of volatility. If you would invest 7,131 in Merit Medical Systems on August 29, 2024 and sell it today you would earn a total of 3,235 from holding Merit Medical Systems or generate 45.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Joint Corp vs. Merit Medical Systems
Performance |
| Timeline |
| Joint Corp |
| Merit Medical Systems |
Joint Corp and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joint Corp and Merit Medical
The main advantage of trading using opposite Joint Corp and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Corp 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.| Joint Corp vs. Encompass Health Corp | Joint Corp vs. Pennant Group | Joint Corp vs. Enhabit | Joint Corp vs. ModivCare |
| Merit Medical vs. Femasys | Merit Medical vs. Sharps Technology Warrant | Merit Medical vs. GlucoTrack | Merit Medical vs. Walt Disney |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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