Correlation Between Merit Medical and WIZZ AIR
Can any of the company-specific risk be diversified away by investing in both Merit Medical and WIZZ AIR 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 WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4, you can compare the effects of market volatilities on Merit Medical and WIZZ AIR 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 WIZZ AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and WIZZ AIR.
Diversification Opportunities for Merit Medical and WIZZ AIR
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Merit and WIZZ is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and WIZZ AIR HLDGUNSPADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIZZ AIR HLDGUNSPADR4 has no effect on the direction of Merit Medical i.e., Merit Medical and WIZZ AIR go up and down completely randomly.
Pair Corralation between Merit Medical and WIZZ AIR
Assuming the 90 days trading horizon Merit Medical Systems is expected to generate 0.46 times more return on investment than WIZZ AIR. However, Merit Medical Systems is 2.15 times less risky than WIZZ AIR. It trades about 0.31 of its potential returns per unit of risk. WIZZ AIR HLDGUNSPADR4 is currently generating about -0.32 per unit of risk. If you would invest 9,200 in Merit Medical Systems on October 20, 2024 and sell it today you would earn a total of 700.00 from holding Merit Medical Systems or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. WIZZ AIR HLDGUNSPADR4
Performance |
| Timeline |
| Merit Medical Systems |
| WIZZ AIR HLDGUNSPADR4 |
Merit Medical and WIZZ AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and WIZZ AIR
The main advantage of trading using opposite Merit Medical and WIZZ AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, WIZZ AIR 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 WIZZ AIR will offset losses from the drop in WIZZ AIR's long position.| Merit Medical vs. DEVRY EDUCATION GRP | Merit Medical vs. MAG SILVER | Merit Medical vs. EMBARK EDUCATION LTD | Merit Medical vs. ON SEMICONDUCTOR |
| WIZZ AIR vs. NIGHTINGALE HEALTH EO | WIZZ AIR vs. Universal Health Realty | WIZZ AIR vs. CARDINAL HEALTH | WIZZ AIR vs. RCI Hospitality Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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