Correlation Between Merit Medical and Cytek Biosciences
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Cytek Biosciences 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 Cytek Biosciences 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 Cytek Biosciences, you can compare the effects of market volatilities on Merit Medical and Cytek Biosciences 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 Cytek Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Cytek Biosciences.
Diversification Opportunities for Merit Medical and Cytek Biosciences
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merit and Cytek is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Cytek Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytek Biosciences 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 Cytek Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytek Biosciences has no effect on the direction of Merit Medical i.e., Merit Medical and Cytek Biosciences go up and down completely randomly.
Pair Corralation between Merit Medical and Cytek Biosciences
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.39 times more return on investment than Cytek Biosciences. However, Merit Medical Systems is 2.56 times less risky than Cytek Biosciences. It trades about 0.05 of its potential returns per unit of risk. Cytek Biosciences is currently generating about -0.01 per unit of risk. If you would invest 7,371 in Merit Medical Systems on September 1, 2024 and sell it today you would earn a total of 3,019 from holding Merit Medical Systems or generate 40.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Cytek Biosciences
Performance |
| Timeline |
| Merit Medical Systems |
| Cytek Biosciences |
Merit Medical and Cytek Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Cytek Biosciences
The main advantage of trading using opposite Merit Medical and Cytek Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Cytek Biosciences 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 Cytek Biosciences will offset losses from the drop in Cytek Biosciences' long position.| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
| Cytek Biosciences vs. Profound Medical Corp | Cytek Biosciences vs. Si Bone | Cytek Biosciences vs. Nevro Corp | Cytek Biosciences vs. Paragon 28 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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