Correlation Between Nuwellis and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Nuwellis 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 Nuwellis and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuwellis and Merit Medical Systems, you can compare the effects of market volatilities on Nuwellis 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 Nuwellis with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuwellis and Merit Medical.
Diversification Opportunities for Nuwellis and Merit Medical
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nuwellis and Merit is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nuwellis 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 Nuwellis 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 Nuwellis 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 Nuwellis i.e., Nuwellis and Merit Medical go up and down completely randomly.
Pair Corralation between Nuwellis and Merit Medical
Given the investment horizon of 90 days Nuwellis is expected to generate 18.21 times more return on investment than Merit Medical. However, Nuwellis is 18.21 times more volatile than Merit Medical Systems. It trades about 0.04 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.24 per unit of risk. If you would invest 182.00 in Nuwellis on August 30, 2024 and sell it today you would lose (44.00) from holding Nuwellis or give up 24.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuwellis vs. Merit Medical Systems
Performance |
| Timeline |
| Nuwellis |
| Merit Medical Systems |
Nuwellis and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuwellis and Merit Medical
The main advantage of trading using opposite Nuwellis and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuwellis 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.| Nuwellis vs. ReShape Lifesciences | Nuwellis vs. Tenon Medical | Nuwellis vs. SINTX Technologies | Nuwellis vs. NanoVibronix |
| Merit Medical vs. ReShape Lifesciences | Merit Medical vs. Bone Biologics Corp | Merit Medical vs. Tivic Health Systems | Merit Medical vs. Nuwellis |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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