Correlation Between Kinsale Capital and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital 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 Kinsale Capital and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsale Capital Group and Merit Medical Systems, you can compare the effects of market volatilities on Kinsale Capital 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 Kinsale Capital with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Merit Medical.
Diversification Opportunities for Kinsale Capital and Merit Medical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinsale and Merit is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group 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 Kinsale Capital 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 Kinsale Capital Group 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 Kinsale Capital i.e., Kinsale Capital and Merit Medical go up and down completely randomly.
Pair Corralation between Kinsale Capital and Merit Medical
Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 1.55 times more return on investment than Merit Medical. However, Kinsale Capital is 1.55 times more volatile than Merit Medical Systems. It trades about 0.06 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 27,905 in Kinsale Capital Group on September 3, 2024 and sell it today you would earn a total of 22,939 from holding Kinsale Capital Group or generate 82.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsale Capital Group vs. Merit Medical Systems
Performance |
| Timeline |
| Kinsale Capital Group |
| Merit Medical Systems |
Kinsale Capital and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Merit Medical
The main advantage of trading using opposite Kinsale Capital and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital 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.| Kinsale Capital vs. SPACE | Kinsale Capital vs. Ampleforth | Kinsale Capital vs. ionet | Kinsale Capital vs. KIN |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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