Correlation Between Merit Medical and Siemens Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Siemens Aktiengesellscha 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 Siemens Aktiengesellscha 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 Siemens Aktiengesellschaft, you can compare the effects of market volatilities on Merit Medical and Siemens Aktiengesellscha 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 Siemens Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Siemens Aktiengesellscha.
Diversification Opportunities for Merit Medical and Siemens Aktiengesellscha
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merit and Siemens is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Siemens Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Aktiengesellscha 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 Siemens Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Aktiengesellscha has no effect on the direction of Merit Medical i.e., Merit Medical and Siemens Aktiengesellscha go up and down completely randomly.
Pair Corralation between Merit Medical and Siemens Aktiengesellscha
Assuming the 90 days trading horizon Merit Medical is expected to generate 4.13 times less return on investment than Siemens Aktiengesellscha. In addition to that, Merit Medical is 1.07 times more volatile than Siemens Aktiengesellschaft. It trades about 0.06 of its total potential returns per unit of risk. Siemens Aktiengesellschaft is currently generating about 0.27 per unit of volatility. If you would invest 17,794 in Siemens Aktiengesellschaft on September 13, 2024 and sell it today you would earn a total of 1,758 from holding Siemens Aktiengesellschaft or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Siemens Aktiengesellschaft
Performance |
| Timeline |
| Merit Medical Systems |
| Siemens Aktiengesellscha |
Merit Medical and Siemens Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Siemens Aktiengesellscha
The main advantage of trading using opposite Merit Medical and Siemens Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Siemens Aktiengesellscha 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 Siemens Aktiengesellscha will offset losses from the drop in Siemens Aktiengesellscha's long position.| Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc | Merit Medical vs. Apple Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |