Correlation Between Merit Medical and Enlight Renewable
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Enlight Renewable 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 Enlight Renewable 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 Enlight Renewable Energy, you can compare the effects of market volatilities on Merit Medical and Enlight Renewable 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 Enlight Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Enlight Renewable.
Diversification Opportunities for Merit Medical and Enlight Renewable
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merit and Enlight is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy 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 Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Merit Medical i.e., Merit Medical and Enlight Renewable go up and down completely randomly.
Pair Corralation between Merit Medical and Enlight Renewable
Given the investment horizon of 90 days Merit Medical Systems is expected to under-perform the Enlight Renewable. But the stock apears to be less risky and, when comparing its historical volatility, Merit Medical Systems is 1.67 times less risky than Enlight Renewable. The stock trades about -0.2 of its potential returns per unit of risk. The Enlight Renewable Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,638 in Enlight Renewable Energy on October 11, 2024 and sell it today you would earn a total of 60.00 from holding Enlight Renewable Energy or generate 3.66% 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. Enlight Renewable Energy
Performance |
| Timeline |
| Merit Medical Systems |
| Enlight Renewable Energy |
Merit Medical and Enlight Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Enlight Renewable
The main advantage of trading using opposite Merit Medical and Enlight Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Enlight Renewable 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 Enlight Renewable will offset losses from the drop in Enlight Renewable's long position.| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
| Enlight Renewable vs. East Africa Metals | Enlight Renewable vs. Aluminum of | Enlight Renewable vs. CVR Partners LP | Enlight Renewable vs. Western Copper and |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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