Correlation Between Merit Medical and 552953CD1
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By analyzing existing cross correlation between Merit Medical Systems and MGM Resorts International, you can compare the effects of market volatilities on Merit Medical and 552953CD1 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 552953CD1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and 552953CD1.
Diversification Opportunities for Merit Medical and 552953CD1
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and 552953CD1 is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and MGM Resorts International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM Resorts International 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 552953CD1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM Resorts International has no effect on the direction of Merit Medical i.e., Merit Medical and 552953CD1 go up and down completely randomly.
Pair Corralation between Merit Medical and 552953CD1
Given the investment horizon of 90 days Merit Medical is expected to generate 23.46 times less return on investment than 552953CD1. But when comparing it to its historical volatility, Merit Medical Systems is 28.3 times less risky than 552953CD1. It trades about 0.05 of its potential returns per unit of risk. MGM Resorts International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,406 in MGM Resorts International on September 3, 2024 and sell it today you would earn a total of 219.00 from holding MGM Resorts International or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.36% |
| Values | Daily Returns |
Merit Medical Systems vs. MGM Resorts International
Performance |
| Timeline |
| Merit Medical Systems |
| MGM Resorts International |
Merit Medical and 552953CD1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and 552953CD1
The main advantage of trading using opposite Merit Medical and 552953CD1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, 552953CD1 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 552953CD1 will offset losses from the drop in 552953CD1's long position.The idea behind Merit Medical Systems and MGM Resorts International 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.| 552953CD1 vs. Mesa Air Group | 552953CD1 vs. Willscot Mobile Mini | 552953CD1 vs. Avis Budget Group | 552953CD1 vs. AerSale 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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