Correlation Between Merit Medical and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Franklin Credit 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 Franklin Credit 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 Franklin Credit Management, you can compare the effects of market volatilities on Merit Medical and Franklin Credit 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 Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Franklin Credit.
Diversification Opportunities for Merit Medical and Franklin Credit
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merit and Franklin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana 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 Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Merit Medical i.e., Merit Medical and Franklin Credit go up and down completely randomly.
Pair Corralation between Merit Medical and Franklin Credit
Given the investment horizon of 90 days Merit Medical is expected to generate 5.06 times less return on investment than Franklin Credit. But when comparing it to its historical volatility, Merit Medical Systems is 7.76 times less risky than Franklin Credit. It trades about 0.06 of its potential returns per unit of risk. Franklin Credit Management is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Franklin Credit Management on November 19, 2024 and sell it today you would lose (15.00) from holding Franklin Credit Management or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Merit Medical Systems vs. Franklin Credit Management
Performance |
| Timeline |
| Merit Medical Systems |
| Franklin Credit Mana |
Merit Medical and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Franklin Credit
The main advantage of trading using opposite Merit Medical and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit's long position.| Merit Medical vs. Healthcare Triangle | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Mangoceuticals, Common Stock | Merit Medical vs. FOXO Technologies |
| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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