Correlation Between Merit Medical and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Merit Medical and LOANDEPOT INC 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 LOANDEPOT INC 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 LOANDEPOT INC A, you can compare the effects of market volatilities on Merit Medical and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and LOANDEPOT INC.
Diversification Opportunities for Merit Medical and LOANDEPOT INC
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Merit and LOANDEPOT is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Merit Medical i.e., Merit Medical and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Merit Medical and LOANDEPOT INC
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.38 times more return on investment than LOANDEPOT INC. However, Merit Medical Systems is 2.66 times less risky than LOANDEPOT INC. It trades about 0.38 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.1 per unit of risk. If you would invest 9,150 in Merit Medical Systems on November 7, 2024 and sell it today you would earn a total of 1,150 from holding Merit Medical Systems or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. LOANDEPOT INC A
Performance |
| Timeline |
| Merit Medical Systems |
| LOANDEPOT INC A |
Merit Medical and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and LOANDEPOT INC
The main advantage of trading using opposite Merit Medical and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| Merit Medical vs. Information Services International Dentsu | Merit Medical vs. Extra Space Storage | Merit Medical vs. Singapore Airlines Limited | Merit Medical vs. United Airlines Holdings |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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