Correlation Between Merit Medical and 05565QDM7
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By analyzing existing cross correlation between Merit Medical Systems and BP CAP MKTS, you can compare the effects of market volatilities on Merit Medical and 05565QDM7 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 05565QDM7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and 05565QDM7.
Diversification Opportunities for Merit Medical and 05565QDM7
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and 05565QDM7 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and BP CAP MKTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP CAP MKTS 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 05565QDM7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP CAP MKTS has no effect on the direction of Merit Medical i.e., Merit Medical and 05565QDM7 go up and down completely randomly.
Pair Corralation between Merit Medical and 05565QDM7
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 1.19 times more return on investment than 05565QDM7. However, Merit Medical is 1.19 times more volatile than BP CAP MKTS. It trades about 0.12 of its potential returns per unit of risk. BP CAP MKTS is currently generating about -0.13 per unit of risk. If you would invest 9,557 in Merit Medical Systems on September 3, 2024 and sell it today you would earn a total of 833.00 from holding Merit Medical Systems or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.63% |
| Values | Daily Returns |
Merit Medical Systems vs. BP CAP MKTS
Performance |
| Timeline |
| Merit Medical Systems |
| BP CAP MKTS |
Merit Medical and 05565QDM7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and 05565QDM7
The main advantage of trading using opposite Merit Medical and 05565QDM7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, 05565QDM7 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 05565QDM7 will offset losses from the drop in 05565QDM7's long position.The idea behind Merit Medical Systems and BP CAP MKTS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 05565QDM7 vs. Merit Medical Systems | 05565QDM7 vs. Xponential Fitness | 05565QDM7 vs. Teleflex Incorporated | 05565QDM7 vs. Tower Semiconductor |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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