Correlation Between Merit Medical and 908 Devices
Can any of the company-specific risk be diversified away by investing in both Merit Medical and 908 Devices 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 908 Devices 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 908 Devices, you can compare the effects of market volatilities on Merit Medical and 908 Devices 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 908 Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and 908 Devices.
Diversification Opportunities for Merit Medical and 908 Devices
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and 908 is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and 908 Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 908 Devices 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 908 Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 908 Devices has no effect on the direction of Merit Medical i.e., Merit Medical and 908 Devices go up and down completely randomly.
Pair Corralation between Merit Medical and 908 Devices
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.2 times more return on investment than 908 Devices. However, Merit Medical Systems is 5.11 times less risky than 908 Devices. It trades about 0.27 of its potential returns per unit of risk. 908 Devices is currently generating about -0.14 per unit of risk. If you would invest 9,559 in Merit Medical Systems on August 23, 2024 and sell it today you would earn a total of 849.00 from holding Merit Medical Systems or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. 908 Devices
Performance |
| Timeline |
| Merit Medical Systems |
| 908 Devices |
Merit Medical and 908 Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and 908 Devices
The main advantage of trading using opposite Merit Medical and 908 Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, 908 Devices 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 908 Devices will offset losses from the drop in 908 Devices' long position.| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
| 908 Devices vs. Inari Medical | 908 Devices vs. CONMED | 908 Devices vs. Glaukos Corp | 908 Devices vs. Nevro Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |