Correlation Between Singular Genomics and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Singular Genomics 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 Singular Genomics and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singular Genomics Systems and Merit Medical Systems, you can compare the effects of market volatilities on Singular Genomics 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 Singular Genomics with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singular Genomics and Merit Medical.
Diversification Opportunities for Singular Genomics and Merit Medical
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singular and Merit is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Singular Genomics Systems 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 Singular Genomics 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 Singular Genomics Systems 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 Singular Genomics i.e., Singular Genomics and Merit Medical go up and down completely randomly.
Pair Corralation between Singular Genomics and Merit Medical
Given the investment horizon of 90 days Singular Genomics is expected to generate 1.33 times less return on investment than Merit Medical. In addition to that, Singular Genomics is 5.09 times more volatile than Merit Medical Systems. It trades about 0.01 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 7,245 in Merit Medical Systems on August 30, 2024 and sell it today you would earn a total of 3,121 from holding Merit Medical Systems or generate 43.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singular Genomics Systems vs. Merit Medical Systems
Performance |
| Timeline |
| Singular Genomics Systems |
| Merit Medical Systems |
Singular Genomics and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singular Genomics and Merit Medical
The main advantage of trading using opposite Singular Genomics and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singular Genomics 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.| Singular Genomics vs. ReShape Lifesciences | Singular Genomics vs. Bone Biologics Corp | Singular Genomics vs. Tivic Health Systems | Singular Genomics vs. Nuwellis |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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