Correlation Between Ping An and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Merit Medical Systems, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Merit Medical.
Diversification Opportunities for Ping An and Merit Medical
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ping and Merit is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance 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 Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Merit Medical go up and down completely randomly.
Pair Corralation between Ping An and Merit Medical
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Merit Medical. In addition to that, Ping An is 1.32 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 0.27 per unit of volatility. If you would invest 8,600 in Merit Medical Systems on September 1, 2024 and sell it today you would earn a total of 1,150 from holding Merit Medical Systems or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Merit Medical Systems
Performance |
| Timeline |
| Ping An Insurance |
| Merit Medical Systems |
Ping An and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Merit Medical
The main advantage of trading using opposite Ping An and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. Meiko Electronics Co | Ping An vs. North American Construction | Ping An vs. Sterling Construction | Ping An vs. UET United Electronic |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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