Correlation Between Merit Medical and COMINTL BANK
Can any of the company-specific risk be diversified away by investing in both Merit Medical and COMINTL BANK 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 COMINTL BANK 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 COMINTL BANK ADR1, you can compare the effects of market volatilities on Merit Medical and COMINTL BANK 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 COMINTL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and COMINTL BANK.
Diversification Opportunities for Merit Medical and COMINTL BANK
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merit and COMINTL is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and COMINTL BANK ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMINTL BANK ADR1 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 COMINTL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMINTL BANK ADR1 has no effect on the direction of Merit Medical i.e., Merit Medical and COMINTL BANK go up and down completely randomly.
Pair Corralation between Merit Medical and COMINTL BANK
Assuming the 90 days trading horizon Merit Medical Systems is expected to under-perform the COMINTL BANK. But the stock apears to be less risky and, when comparing its historical volatility, Merit Medical Systems is 1.36 times less risky than COMINTL BANK. The stock trades about -0.25 of its potential returns per unit of risk. The COMINTL BANK ADR1 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 130.00 in COMINTL BANK ADR1 on September 21, 2024 and sell it today you would earn a total of 1.00 from holding COMINTL BANK ADR1 or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Merit Medical Systems vs. COMINTL BANK ADR1
Performance |
| Timeline |
| Merit Medical Systems |
| COMINTL BANK ADR1 |
Merit Medical and COMINTL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and COMINTL BANK
The main advantage of trading using opposite Merit Medical and COMINTL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, COMINTL BANK 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 COMINTL BANK will offset losses from the drop in COMINTL BANK's long position.| Merit Medical vs. PARKEN Sport Entertainment | Merit Medical vs. T MOBILE US | Merit Medical vs. NTG Nordic Transport | Merit Medical vs. SBA Communications Corp |
| COMINTL BANK vs. Chiba Bank | COMINTL BANK vs. QBE Insurance Group | COMINTL BANK vs. Merit Medical Systems | COMINTL BANK vs. The Hanover Insurance |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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