Correlation Between Merit Medical and Eagle Pointome
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Eagle Pointome 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 Eagle Pointome 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 Eagle Pointome, you can compare the effects of market volatilities on Merit Medical and Eagle Pointome 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 Eagle Pointome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Eagle Pointome.
Diversification Opportunities for Merit Medical and Eagle Pointome
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merit and Eagle is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Eagle Pointome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pointome 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 Eagle Pointome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Pointome has no effect on the direction of Merit Medical i.e., Merit Medical and Eagle Pointome go up and down completely randomly.
Pair Corralation between Merit Medical and Eagle Pointome
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 4.8 times more return on investment than Eagle Pointome. However, Merit Medical is 4.8 times more volatile than Eagle Pointome. It trades about 0.12 of its potential returns per unit of risk. Eagle Pointome is currently generating about 0.13 per unit of risk. If you would invest 9,557 in Merit Medical Systems on September 2, 2024 and sell it today you would earn a total of 833.00 from holding Merit Medical Systems or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Eagle Pointome
Performance |
| Timeline |
| Merit Medical Systems |
| Eagle Pointome |
Merit Medical and Eagle Pointome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Eagle Pointome
The main advantage of trading using opposite Merit Medical and Eagle Pointome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Eagle Pointome 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 Eagle Pointome will offset losses from the drop in Eagle Pointome's long position.| Merit Medical vs. Profound Medical Corp | Merit Medical vs. Si Bone | Merit Medical vs. Nevro Corp | Merit Medical vs. Orthopediatrics Corp |
| Eagle Pointome vs. Visa Class A | Eagle Pointome vs. Diamond Hill Investment | Eagle Pointome vs. Distoken Acquisition | Eagle Pointome vs. Associated Capital Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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