Correlation Between Merit Medical and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Merit Medical and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Gruppo Mutuionline.
Diversification Opportunities for Merit Medical and Gruppo Mutuionline
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merit and Gruppo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Merit Medical i.e., Merit Medical and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Merit Medical and Gruppo Mutuionline
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.84 times more return on investment than Gruppo Mutuionline. However, Merit Medical Systems is 1.19 times less risky than Gruppo Mutuionline. It trades about 0.05 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about -0.04 per unit of risk. If you would invest 9,750 in Merit Medical Systems on October 30, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Merit Medical Systems |
| Gruppo Mutuionline SpA |
Merit Medical and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Gruppo Mutuionline
The main advantage of trading using opposite Merit Medical and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Merit Medical vs. PARKEN Sport Entertainment | Merit Medical vs. CAREER EDUCATION | Merit Medical vs. Fortescue Metals Group | Merit Medical vs. DEVRY EDUCATION GRP |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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