Correlation Between Prairie Operating and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Prairie Operating 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 Prairie Operating and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prairie Operating Co and Merit Medical Systems, you can compare the effects of market volatilities on Prairie Operating 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 Prairie Operating with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prairie Operating and Merit Medical.
Diversification Opportunities for Prairie Operating and Merit Medical
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prairie and Merit is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Prairie Operating Co 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 Prairie Operating 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 Prairie Operating Co 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 Prairie Operating i.e., Prairie Operating and Merit Medical go up and down completely randomly.
Pair Corralation between Prairie Operating and Merit Medical
Given the investment horizon of 90 days Prairie Operating Co is expected to under-perform the Merit Medical. In addition to that, Prairie Operating is 2.84 times more volatile than Merit Medical Systems. It trades about -0.05 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.23 per unit of volatility. If you would invest 9,908 in Merit Medical Systems on September 4, 2024 and sell it today you would earn a total of 575.00 from holding Merit Medical Systems or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prairie Operating Co vs. Merit Medical Systems
Performance |
| Timeline |
| Prairie Operating |
| Merit Medical Systems |
Prairie Operating and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prairie Operating and Merit Medical
The main advantage of trading using opposite Prairie Operating and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prairie Operating 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.| Prairie Operating vs. Merit Medical Systems | Prairie Operating vs. Yuexiu Transport Infrastructure | Prairie Operating vs. US Global Investors | Prairie Operating vs. Verra Mobility Corp |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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