Correlation Between Merit Medical and Veea
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Veea 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 Veea 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 Veea Inc, you can compare the effects of market volatilities on Merit Medical and Veea 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 Veea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Veea.
Diversification Opportunities for Merit Medical and Veea
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and Veea is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc 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 Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Merit Medical i.e., Merit Medical and Veea go up and down completely randomly.
Pair Corralation between Merit Medical and Veea
Given the investment horizon of 90 days Merit Medical is expected to generate 27.13 times less return on investment than Veea. But when comparing it to its historical volatility, Merit Medical Systems is 6.5 times less risky than Veea. It trades about 0.03 of its potential returns per unit of risk. Veea Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Veea Inc on September 13, 2024 and sell it today you would earn a total of 36.00 from holding Veea Inc or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Veea Inc
Performance |
| Timeline |
| Merit Medical Systems |
| Veea Inc |
Merit Medical and Veea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Veea
The main advantage of trading using opposite Merit Medical and Veea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Veea 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 Veea will offset losses from the drop in Veea's long position.| Merit Medical vs. Avita Medical | Merit Medical vs. Sight Sciences | Merit Medical vs. Treace Medical Concepts | Merit Medical vs. Neuropace |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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