Correlation Between Merit Medical and Television Broadcasts
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Television Broadcasts 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 Television Broadcasts 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 Television Broadcasts Limited, you can compare the effects of market volatilities on Merit Medical and Television Broadcasts 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 Television Broadcasts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Television Broadcasts.
Diversification Opportunities for Merit Medical and Television Broadcasts
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merit and Television is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Television Broadcasts Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Television Broadcasts 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 Television Broadcasts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Television Broadcasts has no effect on the direction of Merit Medical i.e., Merit Medical and Television Broadcasts go up and down completely randomly.
Pair Corralation between Merit Medical and Television Broadcasts
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.97 times more return on investment than Television Broadcasts. However, Merit Medical Systems is 1.03 times less risky than Television Broadcasts. It trades about 0.11 of its potential returns per unit of risk. Television Broadcasts Limited is currently generating about 0.04 per unit of risk. If you would invest 9,400 in Merit Medical Systems on November 6, 2024 and sell it today you would earn a total of 900.00 from holding Merit Medical Systems or generate 9.57% 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. Television Broadcasts Limited
Performance |
| Timeline |
| Merit Medical Systems |
| Television Broadcasts |
Merit Medical and Television Broadcasts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Television Broadcasts
The main advantage of trading using opposite Merit Medical and Television Broadcasts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Television Broadcasts 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 Television Broadcasts will offset losses from the drop in Television Broadcasts' 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 |
| Television Broadcasts vs. X FAB Silicon Foundries | Television Broadcasts vs. Siamgas And Petrochemicals | Television Broadcasts vs. LAir Liquide SA | Television Broadcasts vs. BRIT AMER TOBACCO |
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 Directory module to find actively traded commodities issued by global exchanges.
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