Correlation Between Merit Medical and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Merit Medical and KLA Tencor 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 KLA Tencor 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 KLA Tencor, you can compare the effects of market volatilities on Merit Medical and KLA Tencor 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 KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and KLA Tencor.
Diversification Opportunities for Merit Medical and KLA Tencor
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and KLA is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor 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 KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Merit Medical i.e., Merit Medical and KLA Tencor go up and down completely randomly.
Pair Corralation between Merit Medical and KLA Tencor
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.39 times more return on investment than KLA Tencor. However, Merit Medical Systems is 2.55 times less risky than KLA Tencor. It trades about 0.13 of its potential returns per unit of risk. KLA Tencor is currently generating about -0.1 per unit of risk. If you would invest 9,581 in Merit Medical Systems on August 28, 2024 and sell it today you would earn a total of 911.00 from holding Merit Medical Systems or generate 9.51% 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. KLA Tencor
Performance |
| Timeline |
| Merit Medical Systems |
| KLA Tencor |
Merit Medical and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and KLA Tencor
The main advantage of trading using opposite Merit Medical and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, KLA Tencor 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 KLA Tencor will offset losses from the drop in KLA Tencor's long position.| Merit Medical vs. Heartbeam | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Nutex Health | Merit Medical vs. Healthcare Triangle |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |