Correlation Between Merit Medical and Korn Ferry
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Korn Ferry 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 Korn Ferry 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 Korn Ferry, you can compare the effects of market volatilities on Merit Medical and Korn Ferry 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 Korn Ferry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Korn Ferry.
Diversification Opportunities for Merit Medical and Korn Ferry
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merit and Korn is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Korn Ferry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korn Ferry 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 Korn Ferry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korn Ferry has no effect on the direction of Merit Medical i.e., Merit Medical and Korn Ferry go up and down completely randomly.
Pair Corralation between Merit Medical and Korn Ferry
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.61 times more return on investment than Korn Ferry. However, Merit Medical Systems is 1.64 times less risky than Korn Ferry. It trades about 0.06 of its potential returns per unit of risk. Korn Ferry is currently generating about -0.12 per unit of risk. If you would invest 9,750 in Merit Medical Systems on September 13, 2024 and sell it today you would earn a total of 200.00 from holding Merit Medical Systems or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Korn Ferry
Performance |
| Timeline |
| Merit Medical Systems |
| Korn Ferry |
Merit Medical and Korn Ferry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Korn Ferry
The main advantage of trading using opposite Merit Medical and Korn Ferry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Korn Ferry 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 Korn Ferry will offset losses from the drop in Korn Ferry's long position.| Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc |
| Korn Ferry vs. SOLSTAD OFFSHORE NK | Korn Ferry vs. Cars Inc | Korn Ferry vs. NURAN WIRELESS INC | Korn Ferry vs. Geely Automobile Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |