Correlation Between Tianjin Capital and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital 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 Tianjin Capital and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tianjin Capital Environmental and Merit Medical Systems, you can compare the effects of market volatilities on Tianjin Capital 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 Tianjin Capital with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Merit Medical.
Diversification Opportunities for Tianjin Capital and Merit Medical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Merit is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental 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 Tianjin Capital 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 Tianjin Capital Environmental 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 Tianjin Capital i.e., Tianjin Capital and Merit Medical go up and down completely randomly.
Pair Corralation between Tianjin Capital and Merit Medical
If you would invest 9,866 in Merit Medical Systems on September 1, 2024 and sell it today you would earn a total of 524.00 from holding Merit Medical Systems or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Merit Medical Systems
Performance |
| Timeline |
| Tianjin Capital Envi |
| Merit Medical Systems |
Tianjin Capital and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Merit Medical
The main advantage of trading using opposite Tianjin Capital and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital 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.| Tianjin Capital vs. Legacy Education | Tianjin Capital vs. Apple Inc | Tianjin Capital vs. NVIDIA | Tianjin Capital vs. Microsoft |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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