Correlation Between Merit Medical and Ryman Hospitality
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Ryman Hospitality 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 Ryman Hospitality 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 Ryman Hospitality Properties, you can compare the effects of market volatilities on Merit Medical and Ryman Hospitality 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 Ryman Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Ryman Hospitality.
Diversification Opportunities for Merit Medical and Ryman Hospitality
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merit and Ryman is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Ryman Hospitality Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Hospitality 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 Ryman Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Hospitality has no effect on the direction of Merit Medical i.e., Merit Medical and Ryman Hospitality go up and down completely randomly.
Pair Corralation between Merit Medical and Ryman Hospitality
Given the investment horizon of 90 days Merit Medical is expected to generate 1.18 times less return on investment than Ryman Hospitality. In addition to that, Merit Medical is 1.15 times more volatile than Ryman Hospitality Properties. It trades about 0.04 of its total potential returns per unit of risk. Ryman Hospitality Properties is currently generating about 0.06 per unit of volatility. If you would invest 8,933 in Ryman Hospitality Properties on August 31, 2024 and sell it today you would earn a total of 2,791 from holding Ryman Hospitality Properties or generate 31.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Ryman Hospitality Properties
Performance |
| Timeline |
| Merit Medical Systems |
| Ryman Hospitality |
Merit Medical and Ryman Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Ryman Hospitality
The main advantage of trading using opposite Merit Medical and Ryman Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Ryman Hospitality 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 Ryman Hospitality will offset losses from the drop in Ryman Hospitality'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 |
| Ryman Hospitality vs. RLJ Lodging Trust | Ryman Hospitality vs. Pebblebrook Hotel Trust | Ryman Hospitality vs. Xenia Hotels Resorts | Ryman Hospitality vs. Sunstone Hotel Investors |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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