Correlation Between Telecom and Merit Medical
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By analyzing existing cross correlation between Telecom Italia Capital and Merit Medical Systems, you can compare the effects of market volatilities on Telecom 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 Telecom with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom and Merit Medical.
Diversification Opportunities for Telecom and Merit Medical
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telecom and Merit is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Italia Capital 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 Telecom 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 Telecom Italia Capital 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 Telecom i.e., Telecom and Merit Medical go up and down completely randomly.
Pair Corralation between Telecom and Merit Medical
Assuming the 90 days trading horizon Telecom Italia Capital is expected to under-perform the Merit Medical. In addition to that, Telecom is 1.61 times more volatile than Merit Medical Systems. It trades about -0.12 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.42 per unit of volatility. If you would invest 9,607 in Merit Medical Systems on November 3, 2024 and sell it today you would earn a total of 1,281 from holding Merit Medical Systems or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Telecom Italia Capital vs. Merit Medical Systems
Performance |
| Timeline |
| Telecom Italia Capital |
| Merit Medical Systems |
Telecom and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom and Merit Medical
The main advantage of trading using opposite Telecom and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom 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.| Telecom vs. United Fire Group | Telecom vs. MGIC Investment Corp | Telecom vs. Fernhill Beverage | Telecom vs. The Peoples Insurance |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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