Correlation Between NH Hotel and Merit Medical
Can any of the company-specific risk be diversified away by investing in both NH Hotel 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 NH Hotel and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Hotel Group and Merit Medical Systems, you can compare the effects of market volatilities on NH Hotel 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 NH Hotel with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Hotel and Merit Medical.
Diversification Opportunities for NH Hotel and Merit Medical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NHHEF and Merit is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NH Hotel Group 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 NH Hotel 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 NH Hotel Group 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 NH Hotel i.e., NH Hotel and Merit Medical go up and down completely randomly.
Pair Corralation between NH Hotel and Merit Medical
Assuming the 90 days horizon NH Hotel is expected to generate 1.02 times less return on investment than Merit Medical. In addition to that, NH Hotel is 1.28 times more volatile than Merit Medical Systems. It trades about 0.04 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.05 per unit of volatility. If you would invest 7,192 in Merit Medical Systems on October 23, 2024 and sell it today you would earn a total of 3,186 from holding Merit Medical Systems or generate 44.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NH Hotel Group vs. Merit Medical Systems
Performance |
| Timeline |
| NH Hotel Group |
| Merit Medical Systems |
NH Hotel and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Hotel and Merit Medical
The main advantage of trading using opposite NH Hotel and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Hotel 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.| NH Hotel vs. Xtant Medical Holdings | NH Hotel vs. Ballys Corp | NH Hotel vs. Meli Hotels International | NH Hotel vs. Boyd Gaming |
| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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