Correlation Between Merit Medical and ENDRA Life
Can any of the company-specific risk be diversified away by investing in both Merit Medical and ENDRA Life 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 ENDRA Life 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 ENDRA Life Sciences, you can compare the effects of market volatilities on Merit Medical and ENDRA Life 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 ENDRA Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and ENDRA Life.
Diversification Opportunities for Merit Medical and ENDRA Life
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and ENDRA is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and ENDRA Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENDRA Life Sciences 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 ENDRA Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENDRA Life Sciences has no effect on the direction of Merit Medical i.e., Merit Medical and ENDRA Life go up and down completely randomly.
Pair Corralation between Merit Medical and ENDRA Life
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.13 times more return on investment than ENDRA Life. However, Merit Medical Systems is 7.48 times less risky than ENDRA Life. It trades about 0.21 of its potential returns per unit of risk. ENDRA Life Sciences is currently generating about -0.18 per unit of risk. If you would invest 9,866 in Merit Medical Systems on September 1, 2024 and sell it today you would earn a total of 524.00 from holding Merit Medical Systems or generate 5.31% 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. ENDRA Life Sciences
Performance |
| Timeline |
| Merit Medical Systems |
| ENDRA Life Sciences |
Merit Medical and ENDRA Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and ENDRA Life
The main advantage of trading using opposite Merit Medical and ENDRA Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, ENDRA Life 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 ENDRA Life will offset losses from the drop in ENDRA Life'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 |
| ENDRA Life vs. Burning Rock Biotech | ENDRA Life vs. Neuronetics | ENDRA Life vs. DarioHealth Corp | ENDRA Life vs. Sera Prognostics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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