Correlation Between Merit Medical and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Aquestive Therapeutics 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 Aquestive Therapeutics 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 Aquestive Therapeutics, you can compare the effects of market volatilities on Merit Medical and Aquestive Therapeutics 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 Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Aquestive Therapeutics.
Diversification Opportunities for Merit Medical and Aquestive Therapeutics
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merit and Aquestive is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics 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 Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Merit Medical i.e., Merit Medical and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Merit Medical and Aquestive Therapeutics
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.32 times more return on investment than Aquestive Therapeutics. However, Merit Medical Systems is 3.13 times less risky than Aquestive Therapeutics. It trades about 0.25 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 9,590 in Merit Medical Systems on August 30, 2024 and sell it today you would earn a total of 776.00 from holding Merit Medical Systems or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Aquestive Therapeutics
Performance |
| Timeline |
| Merit Medical Systems |
| Aquestive Therapeutics |
Merit Medical and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Aquestive Therapeutics
The main advantage of trading using opposite Merit Medical and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Aquestive Therapeutics 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 Aquestive Therapeutics will offset losses from the drop in Aquestive Therapeutics' long position.| Merit Medical vs. Femasys | Merit Medical vs. Sharps Technology Warrant | Merit Medical vs. GlucoTrack | Merit Medical vs. Walt Disney |
| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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