Correlation Between Sun Life and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Sun Life 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 Sun Life and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and Merit Medical Systems, you can compare the effects of market volatilities on Sun Life 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 Sun Life with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Merit Medical.
Diversification Opportunities for Sun Life and Merit Medical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Merit is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial 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 Sun Life 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 Sun Life Financial 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 Sun Life i.e., Sun Life and Merit Medical go up and down completely randomly.
Pair Corralation between Sun Life and Merit Medical
Considering the 90-day investment horizon Sun Life is expected to generate 1.25 times less return on investment than Merit Medical. But when comparing it to its historical volatility, Sun Life Financial is 1.21 times less risky than Merit Medical. It trades about 0.29 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 9,587 in Merit Medical Systems on August 25, 2024 and sell it today you would earn a total of 946.00 from holding Merit Medical Systems or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. Merit Medical Systems
Performance |
| Timeline |
| Sun Life Financial |
| Merit Medical Systems |
Sun Life and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Merit Medical
The main advantage of trading using opposite Sun Life and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life 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.| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
| Merit Medical vs. Heartbeam | Merit Medical vs. EUDA Health Holdings | Merit Medical vs. Nutex Health | Merit Medical vs. Healthcare Triangle |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |