Correlation Between Merit Medical and Quipt Home
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Quipt Home 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 Quipt Home 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 Quipt Home Medical, you can compare the effects of market volatilities on Merit Medical and Quipt Home 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 Quipt Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Quipt Home.
Diversification Opportunities for Merit Medical and Quipt Home
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and Quipt is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Quipt Home Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quipt Home Medical 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 Quipt Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quipt Home Medical has no effect on the direction of Merit Medical i.e., Merit Medical and Quipt Home go up and down completely randomly.
Pair Corralation between Merit Medical and Quipt Home
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.38 times more return on investment than Quipt Home. However, Merit Medical Systems is 2.64 times less risky than Quipt Home. It trades about 0.2 of its potential returns per unit of risk. Quipt Home Medical is currently generating about 0.04 per unit of risk. If you would invest 9,880 in Merit Medical Systems on September 2, 2024 and sell it today you would earn a total of 510.00 from holding Merit Medical Systems or generate 5.16% 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. Quipt Home Medical
Performance |
| Timeline |
| Merit Medical Systems |
| Quipt Home Medical |
Merit Medical and Quipt Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Quipt Home
The main advantage of trading using opposite Merit Medical and Quipt Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Quipt Home 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 Quipt Home will offset losses from the drop in Quipt Home's long position.| Merit Medical vs. Profound Medical Corp | Merit Medical vs. Si Bone | Merit Medical vs. Nevro Corp | Merit Medical vs. Orthopediatrics Corp |
| Quipt Home vs. Tela Bio | Quipt Home vs. Treace Medical Concepts | Quipt Home vs. Pulmonx Corp | Quipt Home vs. Profound Medical 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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