Correlation Between Merit Medical and Village Super
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Village Super 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 Village Super 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 Village Super Market, you can compare the effects of market volatilities on Merit Medical and Village Super 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 Village Super. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Village Super.
Diversification Opportunities for Merit Medical and Village Super
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merit and Village is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Village Super Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Super Market 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 Village Super. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Super Market has no effect on the direction of Merit Medical i.e., Merit Medical and Village Super go up and down completely randomly.
Pair Corralation between Merit Medical and Village Super
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.8 times more return on investment than Village Super. However, Merit Medical Systems is 1.24 times less risky than Village Super. It trades about 0.11 of its potential returns per unit of risk. Village Super Market is currently generating about 0.07 per unit of risk. If you would invest 6,874 in Merit Medical Systems on August 26, 2024 and sell it today you would earn a total of 3,659 from holding Merit Medical Systems or generate 53.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Village Super Market
Performance |
| Timeline |
| Merit Medical Systems |
| Village Super Market |
Merit Medical and Village Super Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Village Super
The main advantage of trading using opposite Merit Medical and Village Super positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Village Super 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 Village Super will offset losses from the drop in Village Super's long position.| Merit Medical vs. Heartbeam | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Nutex Health | Merit Medical vs. Healthcare Triangle |
| Village Super vs. Hf Foods Group | Village Super vs. Innovative Food Hldg | Village Super vs. Calavo Growers | Village Super vs. The Chefs Warehouse |
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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