Correlation Between Merit Medical and Altria
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Altria 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 Altria 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 Altria Group, you can compare the effects of market volatilities on Merit Medical and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Altria.
Diversification Opportunities for Merit Medical and Altria
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merit and Altria is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Merit Medical i.e., Merit Medical and Altria go up and down completely randomly.
Pair Corralation between Merit Medical and Altria
Given the investment horizon of 90 days Merit Medical is expected to generate 1.04 times less return on investment than Altria. In addition to that, Merit Medical is 1.59 times more volatile than Altria Group. It trades about 0.23 of its total potential returns per unit of risk. Altria Group is currently generating about 0.37 per unit of volatility. If you would invest 5,388 in Altria Group on September 4, 2024 and sell it today you would earn a total of 330.00 from holding Altria Group or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Altria Group
Performance |
| Timeline |
| Merit Medical Systems |
| Altria Group |
Merit Medical and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Altria
The main advantage of trading using opposite Merit Medical and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| Merit Medical vs. Baxter International | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ResMed Inc | Merit Medical vs. The Cooper Companies, |
| Altria vs. British American Tobacco | Altria vs. Universal | Altria vs. Imperial Brands PLC | Altria vs. Philip Morris International |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |