Correlation Between Merit Medical and Evertz Technologies
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Evertz Technologies 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 Evertz Technologies 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 Evertz Technologies Limited, you can compare the effects of market volatilities on Merit Medical and Evertz Technologies 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 Evertz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Evertz Technologies.
Diversification Opportunities for Merit Medical and Evertz Technologies
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Merit and Evertz is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Evertz Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertz Technologies 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 Evertz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertz Technologies has no effect on the direction of Merit Medical i.e., Merit Medical and Evertz Technologies go up and down completely randomly.
Pair Corralation between Merit Medical and Evertz Technologies
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.55 times more return on investment than Evertz Technologies. However, Merit Medical Systems is 1.8 times less risky than Evertz Technologies. It trades about -0.12 of its potential returns per unit of risk. Evertz Technologies Limited is currently generating about -0.25 per unit of risk. If you would invest 10,583 in Merit Medical Systems on November 28, 2024 and sell it today you would lose (380.00) from holding Merit Medical Systems or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Merit Medical Systems vs. Evertz Technologies Limited
Performance |
| Timeline |
| Merit Medical Systems |
| Evertz Technologies |
Merit Medical and Evertz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Evertz Technologies
The main advantage of trading using opposite Merit Medical and Evertz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Evertz Technologies 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 Evertz Technologies will offset losses from the drop in Evertz Technologies' long position.| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
| Evertz Technologies vs. Boxlight Corp Class | Evertz Technologies vs. Siyata Mobile | Evertz Technologies vs. ClearOne |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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