Correlation Between RLX Technology and Merit Medical
Can any of the company-specific risk be diversified away by investing in both RLX Technology 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 RLX Technology and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and Merit Medical Systems, you can compare the effects of market volatilities on RLX Technology 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 RLX Technology with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Merit Medical.
Diversification Opportunities for RLX Technology and Merit Medical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RLX and Merit is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology 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 RLX Technology 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 RLX Technology 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 RLX Technology i.e., RLX Technology and Merit Medical go up and down completely randomly.
Pair Corralation between RLX Technology and Merit Medical
Considering the 90-day investment horizon RLX Technology is expected to generate 1.15 times less return on investment than Merit Medical. In addition to that, RLX Technology is 1.81 times more volatile than Merit Medical Systems. It trades about 0.02 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.04 per unit of volatility. If you would invest 8,291 in Merit Medical Systems on September 12, 2024 and sell it today you would earn a total of 2,088 from holding Merit Medical Systems or generate 25.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX Technology vs. Merit Medical Systems
Performance |
| Timeline |
| RLX Technology |
| Merit Medical Systems |
RLX Technology and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and Merit Medical
The main advantage of trading using opposite RLX Technology and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology 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.| RLX Technology vs. Universal | RLX Technology vs. Imperial Brands PLC | RLX Technology vs. British American Tobacco | RLX Technology vs. Philip Morris International |
| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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