Correlation Between Merit Medical and Natures Miracle
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Natures Miracle 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 Natures Miracle 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 Natures Miracle Holding, you can compare the effects of market volatilities on Merit Medical and Natures Miracle 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 Natures Miracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Natures Miracle.
Diversification Opportunities for Merit Medical and Natures Miracle
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merit and Natures is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Natures Miracle Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Miracle Holding 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 Natures Miracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Miracle Holding has no effect on the direction of Merit Medical i.e., Merit Medical and Natures Miracle go up and down completely randomly.
Pair Corralation between Merit Medical and Natures Miracle
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.11 times more return on investment than Natures Miracle. However, Merit Medical Systems is 9.43 times less risky than Natures Miracle. It trades about 0.07 of its potential returns per unit of risk. Natures Miracle Holding is currently generating about -0.18 per unit of risk. If you would invest 10,120 in Merit Medical Systems on September 15, 2024 and sell it today you would earn a total of 156.00 from holding Merit Medical Systems or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Natures Miracle Holding
Performance |
| Timeline |
| Merit Medical Systems |
| Natures Miracle Holding |
Merit Medical and Natures Miracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Natures Miracle
The main advantage of trading using opposite Merit Medical and Natures Miracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Natures Miracle 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 Natures Miracle will offset losses from the drop in Natures Miracle's long position.| Merit Medical vs. Avita Medical | Merit Medical vs. Sight Sciences | Merit Medical vs. Treace Medical Concepts | Merit Medical vs. Neuropace |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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