Correlation Between SMA Solar and Merit Medical
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Merit Medical Systems, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Merit Medical.
Diversification Opportunities for SMA Solar and Merit Medical
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SMA and Merit is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar 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 SMA Solar 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 SMA Solar 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 SMA Solar i.e., SMA Solar and Merit Medical go up and down completely randomly.
Pair Corralation between SMA Solar and Merit Medical
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Merit Medical. In addition to that, SMA Solar is 2.24 times more volatile than Merit Medical Systems. It trades about -0.06 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 6,450 in Merit Medical Systems on September 24, 2024 and sell it today you would earn a total of 2,650 from holding Merit Medical Systems or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Merit Medical Systems
Performance |
| Timeline |
| SMA Solar Technology |
| Merit Medical Systems |
SMA Solar and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Merit Medical
The main advantage of trading using opposite SMA Solar and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.| SMA Solar vs. First Solar | SMA Solar vs. SolarEdge Technologies | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Sunrun Inc |
| Merit Medical vs. Sunny Optical Technology | Merit Medical vs. Hollywood Bowl Group | Merit Medical vs. Amkor Technology | Merit Medical vs. SMA Solar Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |