Correlation Between Merit Medical and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Mars Acquisition 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 Mars Acquisition 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 Mars Acquisition Corp, you can compare the effects of market volatilities on Merit Medical and Mars Acquisition 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Mars Acquisition.
Diversification Opportunities for Merit Medical and Mars Acquisition
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merit and Mars is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Merit Medical i.e., Merit Medical and Mars Acquisition go up and down completely randomly.
Pair Corralation between Merit Medical and Mars Acquisition
Given the investment horizon of 90 days Merit Medical is expected to generate 9.13 times less return on investment than Mars Acquisition. But when comparing it to its historical volatility, Merit Medical Systems is 6.75 times less risky than Mars Acquisition. It trades about 0.06 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Mars Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Mars Acquisition Corp or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 40.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Mars Acquisition Corp
Performance |
| Timeline |
| Merit Medical Systems |
| Mars Acquisition Corp |
Merit Medical and Mars Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Mars Acquisition
The main advantage of trading using opposite Merit Medical and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition'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 |
| Mars Acquisition vs. HUMANA INC | Mars Acquisition vs. Barloworld Ltd ADR | Mars Acquisition vs. Morningstar Unconstrained Allocation | Mars Acquisition vs. Thrivent High Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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