Correlation Between Merit Medical and ATI Physical
Can any of the company-specific risk be diversified away by investing in both Merit Medical and ATI Physical 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 ATI Physical 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 ATI Physical Therapy, you can compare the effects of market volatilities on Merit Medical and ATI Physical 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 ATI Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and ATI Physical.
Diversification Opportunities for Merit Medical and ATI Physical
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merit and ATI is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy 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 ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Merit Medical i.e., Merit Medical and ATI Physical go up and down completely randomly.
Pair Corralation between Merit Medical and ATI Physical
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.16 times more return on investment than ATI Physical. However, Merit Medical Systems is 6.33 times less risky than ATI Physical. It trades about 0.14 of its potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.33 per unit of risk. If you would invest 9,768 in Merit Medical Systems on August 28, 2024 and sell it today you would earn a total of 724.00 from holding Merit Medical Systems or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. ATI Physical Therapy
Performance |
| Timeline |
| Merit Medical Systems |
| ATI Physical Therapy |
Merit Medical and ATI Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and ATI Physical
The main advantage of trading using opposite Merit Medical and ATI Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, ATI Physical 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 ATI Physical will offset losses from the drop in ATI Physical's long position.| Merit Medical vs. Heartbeam | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Nutex Health | Merit Medical vs. Healthcare Triangle |
| ATI Physical vs. Universal Health Services | ATI Physical vs. Lifestance Health Group | ATI Physical vs. Select Medical Holdings | ATI Physical vs. Acadia Healthcare |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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