Correlation Between Natural Alternatives and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Natural Alternatives and Merit Medical 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 Natural Alternatives and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Alternatives International and Merit Medical Systems, you can compare the effects of market volatilities on Natural Alternatives and Merit Medical 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 Natural Alternatives with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Alternatives and Merit Medical.
Diversification Opportunities for Natural Alternatives and Merit Medical
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Natural and Merit is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and Merit Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merit Medical Systems and Natural Alternatives 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 Natural Alternatives International are associated (or correlated) with Merit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merit Medical Systems has no effect on the direction of Natural Alternatives i.e., Natural Alternatives and Merit Medical go up and down completely randomly.
Pair Corralation between Natural Alternatives and Merit Medical
Given the investment horizon of 90 days Natural Alternatives International is expected to under-perform the Merit Medical. In addition to that, Natural Alternatives is 1.92 times more volatile than Merit Medical Systems. It trades about -0.02 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.06 per unit of volatility. If you would invest 7,111 in Merit Medical Systems on August 26, 2024 and sell it today you would earn a total of 3,422 from holding Merit Medical Systems or generate 48.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Alternatives Internati vs. Merit Medical Systems
Performance |
| Timeline |
| Natural Alternatives |
| Merit Medical Systems |
Natural Alternatives and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Alternatives and Merit Medical
The main advantage of trading using opposite Natural Alternatives and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Alternatives position performs unexpectedly, Merit Medical 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 Merit Medical will offset losses from the drop in Merit Medical's long position.| Natural Alternatives vs. FitLife Brands, Common | Natural Alternatives vs. Lifeway Foods | Natural Alternatives vs. Else Nutrition Holdings | Natural Alternatives vs. Central Garden Pet |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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