Correlation Between Spring Valley and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Spring Valley 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 Spring Valley and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Valley Acquisition and Merit Medical Systems, you can compare the effects of market volatilities on Spring Valley 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 Spring Valley with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and Merit Medical.
Diversification Opportunities for Spring Valley and Merit Medical
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spring and Merit is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition 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 Spring Valley 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 Spring Valley Acquisition 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 Spring Valley i.e., Spring Valley and Merit Medical go up and down completely randomly.
Pair Corralation between Spring Valley and Merit Medical
Assuming the 90 days horizon Spring Valley Acquisition is expected to generate 95.78 times more return on investment than Merit Medical. However, Spring Valley is 95.78 times more volatile than Merit Medical Systems. It trades about 0.1 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.16 per unit of risk. If you would invest 15.00 in Spring Valley Acquisition on September 12, 2024 and sell it today you would lose (6.00) from holding Spring Valley Acquisition or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.6% |
| Values | Daily Returns |
Spring Valley Acquisition vs. Merit Medical Systems
Performance |
| Timeline |
| Spring Valley Acquisition |
| Merit Medical Systems |
Spring Valley and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Valley and Merit Medical
The main advantage of trading using opposite Spring Valley and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley 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.| Spring Valley vs. Voyager Acquisition Corp | Spring Valley vs. YHN Acquisition I | Spring Valley vs. CO2 Energy Transition | Spring Valley vs. Vine Hill Capital |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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