Correlation Between Merit Medical and Seven West
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Seven West 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 Seven West 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 Seven West Media, you can compare the effects of market volatilities on Merit Medical and Seven West 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 Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Seven West.
Diversification Opportunities for Merit Medical and Seven West
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and Seven is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Merit Medical i.e., Merit Medical and Seven West go up and down completely randomly.
Pair Corralation between Merit Medical and Seven West
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.66 times more return on investment than Seven West. However, Merit Medical Systems is 1.52 times less risky than Seven West. It trades about 0.27 of its potential returns per unit of risk. Seven West Media is currently generating about -0.02 per unit of risk. If you would invest 8,600 in Merit Medical Systems on September 1, 2024 and sell it today you would earn a total of 1,150 from holding Merit Medical Systems or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Seven West Media
Performance |
| Timeline |
| Merit Medical Systems |
| Seven West Media |
Merit Medical and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Seven West
The main advantage of trading using opposite Merit Medical and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| Merit Medical vs. Clean Energy Fuels | Merit Medical vs. Cardinal Health | Merit Medical vs. DiamondRock Hospitality | Merit Medical vs. Bumrungrad Hospital Public |
| Seven West vs. Live Nation Entertainment | Seven West vs. Fuji Media Holdings | Seven West vs. Rai Way SpA | Seven West vs. Superior Plus Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |