Correlation Between Zoom Video and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Zoom Video 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 Zoom Video and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zoom Video Communications and Merit Medical Systems, you can compare the effects of market volatilities on Zoom Video 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 Zoom Video with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Merit Medical.
Diversification Opportunities for Zoom Video and Merit Medical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zoom and Merit is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications 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 Zoom Video 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 Zoom Video Communications 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 Zoom Video i.e., Zoom Video and Merit Medical go up and down completely randomly.
Pair Corralation between Zoom Video and Merit Medical
Allowing for the 90-day total investment horizon Zoom Video Communications is expected to under-perform the Merit Medical. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 1.26 times less risky than Merit Medical. The stock trades about -0.16 of its potential returns per unit of risk. The Merit Medical Systems is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 9,711 in Merit Medical Systems on January 7, 2025 and sell it today you would lose (461.00) from holding Merit Medical Systems or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Merit Medical Systems
Performance |
| Timeline |
| Zoom Video Communications |
| Merit Medical Systems |
Zoom Video and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Merit Medical
The main advantage of trading using opposite Zoom Video and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video 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.| Zoom Video vs. Agilysys | Zoom Video vs. ADEIA P | Zoom Video vs. Paycor HCM | Zoom Video vs. Paylocity Holdng |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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