Correlation Between Merit Medical and U Power
Can any of the company-specific risk be diversified away by investing in both Merit Medical and U Power 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 U Power 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 U Power Limited, you can compare the effects of market volatilities on Merit Medical and U Power 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 U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and U Power.
Diversification Opportunities for Merit Medical and U Power
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and UCAR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited 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 U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of Merit Medical i.e., Merit Medical and U Power go up and down completely randomly.
Pair Corralation between Merit Medical and U Power
Given the investment horizon of 90 days Merit Medical is expected to generate 44.96 times less return on investment than U Power. But when comparing it to its historical volatility, Merit Medical Systems is 43.01 times less risky than U Power. It trades about 0.05 of its potential returns per unit of risk. U Power Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in U Power Limited on September 20, 2024 and sell it today you would earn a total of 665.00 from holding U Power Limited or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.05% |
| Values | Daily Returns |
Merit Medical Systems vs. U Power Limited
Performance |
| Timeline |
| Merit Medical Systems |
| U Power Limited |
Merit Medical and U Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and U Power
The main advantage of trading using opposite Merit Medical and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, U Power 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 U Power will offset losses from the drop in U Power'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 |
| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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