Correlation Between Merit Medical and Check Cap
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Check Cap 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 Check Cap 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 Check Cap, you can compare the effects of market volatilities on Merit Medical and Check Cap 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 Check Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Check Cap.
Diversification Opportunities for Merit Medical and Check Cap
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and Check is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap 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 Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of Merit Medical i.e., Merit Medical and Check Cap go up and down completely randomly.
Pair Corralation between Merit Medical and Check Cap
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.33 times more return on investment than Check Cap. However, Merit Medical Systems is 2.99 times less risky than Check Cap. It trades about 0.17 of its potential returns per unit of risk. Check Cap is currently generating about -0.2 per unit of risk. If you would invest 8,091 in Merit Medical Systems on August 28, 2024 and sell it today you would earn a total of 2,401 from holding Merit Medical Systems or generate 29.67% 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. Check Cap
Performance |
| Timeline |
| Merit Medical Systems |
| Check Cap |
Merit Medical and Check Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Check Cap
The main advantage of trading using opposite Merit Medical and Check Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Check Cap 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 Check Cap will offset losses from the drop in Check Cap's long position.| Merit Medical vs. Nutex Health | Merit Medical vs. Mangoceuticals, Common Stock | Merit Medical vs. Aclarion |
| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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