Correlation Between Merit Medical and UNIPHAR PLC
Can any of the company-specific risk be diversified away by investing in both Merit Medical and UNIPHAR PLC 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 Merit Medical and UNIPHAR PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merit Medical Systems and UNIPHAR PLC EO, you can compare the effects of market volatilities on Merit Medical and UNIPHAR PLC 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 Merit Medical with a short position of UNIPHAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and UNIPHAR PLC.
Diversification Opportunities for Merit Medical and UNIPHAR PLC
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merit and UNIPHAR is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and UNIPHAR PLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIPHAR PLC EO and Merit Medical 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 Merit Medical Systems are associated (or correlated) with UNIPHAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIPHAR PLC EO has no effect on the direction of Merit Medical i.e., Merit Medical and UNIPHAR PLC go up and down completely randomly.
Pair Corralation between Merit Medical and UNIPHAR PLC
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.84 times more return on investment than UNIPHAR PLC. However, Merit Medical Systems is 1.19 times less risky than UNIPHAR PLC. It trades about 0.14 of its potential returns per unit of risk. UNIPHAR PLC EO is currently generating about -0.2 per unit of risk. If you would invest 8,850 in Merit Medical Systems on August 30, 2024 and sell it today you would earn a total of 900.00 from holding Merit Medical Systems or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Merit Medical Systems vs. UNIPHAR PLC EO
Performance |
| Timeline |
| Merit Medical Systems |
| UNIPHAR PLC EO |
Merit Medical and UNIPHAR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and UNIPHAR PLC
The main advantage of trading using opposite Merit Medical and UNIPHAR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, UNIPHAR PLC 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 UNIPHAR PLC will offset losses from the drop in UNIPHAR PLC's long position.| Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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