Correlation Between Merit Medical and Ensurge Micropower
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Ensurge Micropower 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 Ensurge Micropower 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 Ensurge Micropower ASA, you can compare the effects of market volatilities on Merit Medical and Ensurge Micropower 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 Ensurge Micropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Ensurge Micropower.
Diversification Opportunities for Merit Medical and Ensurge Micropower
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and Ensurge is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA 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 Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of Merit Medical i.e., Merit Medical and Ensurge Micropower go up and down completely randomly.
Pair Corralation between Merit Medical and Ensurge Micropower
Given the investment horizon of 90 days Merit Medical is expected to generate 25.35 times less return on investment than Ensurge Micropower. But when comparing it to its historical volatility, Merit Medical Systems is 20.49 times less risky than Ensurge Micropower. It trades about 0.09 of its potential returns per unit of risk. Ensurge Micropower ASA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Ensurge Micropower ASA on September 12, 2024 and sell it today you would lose (20.00) from holding Ensurge Micropower ASA or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 70.69% |
| Values | Daily Returns |
Merit Medical Systems vs. Ensurge Micropower ASA
Performance |
| Timeline |
| Merit Medical Systems |
| Ensurge Micropower ASA |
Merit Medical and Ensurge Micropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Ensurge Micropower
The main advantage of trading using opposite Merit Medical and Ensurge Micropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Ensurge Micropower 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 Ensurge Micropower will offset losses from the drop in Ensurge Micropower'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 |
| Ensurge Micropower vs. Ouster Inc | Ensurge Micropower vs. Kopin | Ensurge Micropower vs. Vicor | Ensurge Micropower vs. Fabrinet |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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