Correlation Between Merit Medical and Weyco
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Weyco 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 Weyco 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 Weyco Group, you can compare the effects of market volatilities on Merit Medical and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Weyco.
Diversification Opportunities for Merit Medical and Weyco
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merit and Weyco is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Merit Medical i.e., Merit Medical and Weyco go up and down completely randomly.
Pair Corralation between Merit Medical and Weyco
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.39 times more return on investment than Weyco. However, Merit Medical Systems is 2.55 times less risky than Weyco. It trades about 0.17 of its potential returns per unit of risk. Weyco Group is currently generating about 0.04 per unit of risk. If you would invest 9,307 in Merit Medical Systems on August 25, 2024 and sell it today you would earn a total of 1,226 from holding Merit Medical Systems or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. Weyco Group
Performance |
| Timeline |
| Merit Medical Systems |
| Weyco Group |
Merit Medical and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and Weyco
The main advantage of trading using opposite Merit Medical and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco's long position.| Merit Medical vs. Heartbeam | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Nutex Health | Merit Medical vs. Healthcare Triangle |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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