Correlation Between Merit Medical and SOUTHWESTERN
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By analyzing existing cross correlation between Merit Medical Systems and SOUTHWESTERN ELEC PWR, you can compare the effects of market volatilities on Merit Medical and SOUTHWESTERN 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 SOUTHWESTERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and SOUTHWESTERN.
Diversification Opportunities for Merit Medical and SOUTHWESTERN
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merit and SOUTHWESTERN is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and SOUTHWESTERN ELEC PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHWESTERN ELEC PWR 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 SOUTHWESTERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHWESTERN ELEC PWR has no effect on the direction of Merit Medical i.e., Merit Medical and SOUTHWESTERN go up and down completely randomly.
Pair Corralation between Merit Medical and SOUTHWESTERN
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 2.57 times more return on investment than SOUTHWESTERN. However, Merit Medical is 2.57 times more volatile than SOUTHWESTERN ELEC PWR. It trades about 0.09 of its potential returns per unit of risk. SOUTHWESTERN ELEC PWR is currently generating about 0.01 per unit of risk. If you would invest 6,780 in Merit Medical Systems on September 12, 2024 and sell it today you would earn a total of 3,599 from holding Merit Medical Systems or generate 53.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.22% |
| Values | Daily Returns |
Merit Medical Systems vs. SOUTHWESTERN ELEC PWR
Performance |
| Timeline |
| Merit Medical Systems |
| SOUTHWESTERN ELEC PWR |
Merit Medical and SOUTHWESTERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and SOUTHWESTERN
The main advantage of trading using opposite Merit Medical and SOUTHWESTERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, SOUTHWESTERN 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 SOUTHWESTERN will offset losses from the drop in SOUTHWESTERN'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 |
| SOUTHWESTERN vs. Insteel Industries | SOUTHWESTERN vs. Allegheny Technologies Incorporated | SOUTHWESTERN vs. Ironveld Plc | SOUTHWESTERN vs. Merit Medical Systems |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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