Correlation Between Merit Medical and Lava Medtech
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Lava Medtech 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 Lava Medtech 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 Lava Medtech Acquisition, you can compare the effects of market volatilities on Merit Medical and Lava Medtech 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 Lava Medtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Lava Medtech.
Diversification Opportunities for Merit Medical and Lava Medtech
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and Lava is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Lava Medtech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lava Medtech Acquisition 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 Lava Medtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lava Medtech Acquisition has no effect on the direction of Merit Medical i.e., Merit Medical and Lava Medtech go up and down completely randomly.
Pair Corralation between Merit Medical and Lava Medtech
If you would invest 8,291 in Merit Medical Systems on September 12, 2024 and sell it today you would earn a total of 2,088 from holding Merit Medical Systems or generate 25.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.27% |
| Values | Daily Returns |
Merit Medical Systems vs. Lava Medtech Acquisition
Performance |
| Timeline |
| Merit Medical Systems |
| Lava Medtech Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merit Medical and Lava Medtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Lava Medtech
The main advantage of trading using opposite Merit Medical and Lava Medtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Lava Medtech 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 Lava Medtech will offset losses from the drop in Lava Medtech'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 |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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