Correlation Between Merit Medical and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Merit Medical and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Merit Medical and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Merit Medical and ELMOS SEMICONDUCTOR
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and ELMOS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of Merit Medical i.e., Merit Medical and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Merit Medical and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.47 times more return on investment than ELMOS SEMICONDUCTOR. However, Merit Medical Systems is 2.14 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.13 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.12 per unit of risk. If you would invest 8,600 in Merit Medical Systems on September 2, 2024 and sell it today you would earn a total of 1,150 from holding Merit Medical Systems or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| Merit Medical Systems |
| ELMOS SEMICONDUCTOR |
Merit Medical and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Merit Medical and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| Merit Medical vs. SCANSOURCE | Merit Medical vs. The Trade Desk | Merit Medical vs. RETAIL FOOD GROUP | Merit Medical vs. CANON MARKETING JP |
| ELMOS SEMICONDUCTOR vs. SIVERS SEMICONDUCTORS AB | ELMOS SEMICONDUCTOR vs. Darden Restaurants | ELMOS SEMICONDUCTOR vs. Reliance Steel Aluminum | ELMOS SEMICONDUCTOR vs. Q2M Managementberatung AG |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |