Correlation Between Merit Medical and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Merit Medical and AOI Electronics 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 AOI Electronics 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 AOI Electronics Co, you can compare the effects of market volatilities on Merit Medical and AOI Electronics 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 AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and AOI Electronics.
Diversification Opportunities for Merit Medical and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merit and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of Merit Medical i.e., Merit Medical and AOI Electronics go up and down completely randomly.
Pair Corralation between Merit Medical and AOI Electronics
If you would invest 6,450 in Merit Medical Systems on November 7, 2024 and sell it today you would earn a total of 3,850 from holding Merit Medical Systems or generate 59.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. AOI Electronics Co
Performance |
| Timeline |
| Merit Medical Systems |
| AOI Electronics |
Merit Medical and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and AOI Electronics
The main advantage of trading using opposite Merit Medical and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' long position.| Merit Medical vs. Scandinavian Tobacco Group | Merit Medical vs. Fidelity National Information | Merit Medical vs. DATADOT TECHNOLOGY | Merit Medical vs. AOI Electronics Co |
| AOI Electronics vs. American Homes 4 | AOI Electronics vs. MPH Health Care | AOI Electronics vs. WESANA HEALTH HOLD | AOI Electronics vs. KENEDIX OFFICE INV |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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