Correlation Between Nevro Corp and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Nevro Corp 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 Nevro Corp and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nevro Corp and Merit Medical Systems, you can compare the effects of market volatilities on Nevro Corp 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 Nevro Corp with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nevro Corp and Merit Medical.
Diversification Opportunities for Nevro Corp and Merit Medical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nevro and Merit is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nevro Corp 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 Nevro Corp 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 Nevro Corp 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 Nevro Corp i.e., Nevro Corp and Merit Medical go up and down completely randomly.
Pair Corralation between Nevro Corp and Merit Medical
Given the investment horizon of 90 days Nevro Corp is expected to under-perform the Merit Medical. In addition to that, Nevro Corp is 4.57 times more volatile than Merit Medical Systems. It trades about -0.13 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.2 per unit of volatility. If you would invest 9,880 in Merit Medical Systems on September 2, 2024 and sell it today you would earn a total of 510.00 from holding Merit Medical Systems or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nevro Corp vs. Merit Medical Systems
Performance |
| Timeline |
| Nevro Corp |
| Merit Medical Systems |
Nevro Corp and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nevro Corp and Merit Medical
The main advantage of trading using opposite Nevro Corp and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nevro Corp 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.| Nevro Corp vs. Integer Holdings Corp | Nevro Corp vs. Glaukos Corp | Nevro Corp vs. CONMED | Nevro Corp vs. Pulmonx Corp |
| Merit Medical vs. Profound Medical Corp | Merit Medical vs. Si Bone | Merit Medical vs. Nevro Corp | Merit Medical vs. Orthopediatrics Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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