Correlation Between Merit Medical and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Jiangsu Expressway 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 Jiangsu Expressway 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 Jiangsu Expressway, you can compare the effects of market volatilities on Merit Medical and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Jiangsu Expressway.
Diversification Opportunities for Merit Medical and Jiangsu Expressway
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and Jiangsu is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Merit Medical i.e., Merit Medical and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between Merit Medical and Jiangsu Expressway
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 2.33 times more return on investment than Jiangsu Expressway. However, Merit Medical is 2.33 times more volatile than Jiangsu Expressway. It trades about 0.24 of its potential returns per unit of risk. Jiangsu Expressway is currently generating about 0.22 per unit of risk. If you would invest 9,627 in Merit Medical Systems on October 20, 2024 and sell it today you would earn a total of 663.00 from holding Merit Medical Systems or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Jiangsu Expressway
Performance |
| Timeline |
| Merit Medical Systems |
| Jiangsu Expressway |
Merit Medical and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Jiangsu Expressway
The main advantage of trading using opposite Merit Medical and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Jiangsu Expressway 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 Jiangsu Expressway will offset losses from the drop in Jiangsu Expressway'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 |
| Jiangsu Expressway vs. BJs Restaurants | Jiangsu Expressway vs. Vistra Energy Corp | Jiangsu Expressway vs. GE Vernova LLC | Jiangsu Expressway vs. RCI Hospitality Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |