Correlation Between Mars Acquisition and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Mars Acquisition 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 Mars Acquisition and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mars Acquisition Corp and Merit Medical Systems, you can compare the effects of market volatilities on Mars Acquisition 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 Mars Acquisition with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mars Acquisition and Merit Medical.
Diversification Opportunities for Mars Acquisition and Merit Medical
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mars and Merit is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mars Acquisition 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 Mars Acquisition 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 Mars Acquisition 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 Mars Acquisition i.e., Mars Acquisition and Merit Medical go up and down completely randomly.
Pair Corralation between Mars Acquisition and Merit Medical
Assuming the 90 days horizon Mars Acquisition Corp is expected to generate 6.75 times more return on investment than Merit Medical. However, Mars Acquisition is 6.75 times more volatile than Merit Medical Systems. It trades about 0.08 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.06 per unit of risk. If you would invest 22.00 in Mars Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Mars Acquisition Corp or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 40.0% |
| Values | Daily Returns |
Mars Acquisition Corp vs. Merit Medical Systems
Performance |
| Timeline |
| Mars Acquisition Corp |
| Merit Medical Systems |
Mars Acquisition and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mars Acquisition and Merit Medical
The main advantage of trading using opposite Mars Acquisition and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mars Acquisition 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.| Mars Acquisition vs. HUMANA INC | Mars Acquisition vs. Barloworld Ltd ADR | Mars Acquisition vs. Morningstar Unconstrained Allocation | Mars Acquisition vs. Thrivent High Yield |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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