Correlation Between Merit Medical and ORACLE
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By analyzing existing cross correlation between Merit Medical Systems and ORACLE P 65, you can compare the effects of market volatilities on Merit Medical and ORACLE 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 ORACLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and ORACLE.
Diversification Opportunities for Merit Medical and ORACLE
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and ORACLE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and ORACLE P 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORACLE P 65 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 ORACLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORACLE P 65 has no effect on the direction of Merit Medical i.e., Merit Medical and ORACLE go up and down completely randomly.
Pair Corralation between Merit Medical and ORACLE
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 1.14 times more return on investment than ORACLE. However, Merit Medical is 1.14 times more volatile than ORACLE P 65. It trades about 0.16 of its potential returns per unit of risk. ORACLE P 65 is currently generating about 0.02 per unit of risk. If you would invest 7,951 in Merit Medical Systems on September 3, 2024 and sell it today you would earn a total of 2,439 from holding Merit Medical Systems or generate 30.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.95% |
| Values | Daily Returns |
Merit Medical Systems vs. ORACLE P 65
Performance |
| Timeline |
| Merit Medical Systems |
| ORACLE P 65 |
Merit Medical and ORACLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and ORACLE
The main advantage of trading using opposite Merit Medical and ORACLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, ORACLE 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 ORACLE will offset losses from the drop in ORACLE's long position.The idea behind Merit Medical Systems and ORACLE P 65 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.| ORACLE vs. Hawkins | ORACLE vs. CF Industries Holdings | ORACLE vs. Merit Medical Systems | ORACLE vs. Cumberland Pharmaceuticals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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