Correlation Between Merit Medical and MSAD Insurance
Can any of the company-specific risk be diversified away by investing in both Merit Medical and MSAD Insurance 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 Merit Medical and MSAD Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merit Medical Systems and MSAD Insurance Group, you can compare the effects of market volatilities on Merit Medical and MSAD Insurance 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 Merit Medical with a short position of MSAD Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and MSAD Insurance.
Diversification Opportunities for Merit Medical and MSAD Insurance
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merit and MSAD is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and MSAD Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSAD Insurance Group and Merit Medical 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 Merit Medical Systems are associated (or correlated) with MSAD Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSAD Insurance Group has no effect on the direction of Merit Medical i.e., Merit Medical and MSAD Insurance go up and down completely randomly.
Pair Corralation between Merit Medical and MSAD Insurance
Given the investment horizon of 90 days Merit Medical Systems is expected to under-perform the MSAD Insurance. In addition to that, Merit Medical is 1.04 times more volatile than MSAD Insurance Group. It trades about -0.02 of its total potential returns per unit of risk. MSAD Insurance Group is currently generating about 0.12 per unit of volatility. If you would invest 1,146 in MSAD Insurance Group on January 25, 2024 and sell it today you would earn a total of 665.00 from holding MSAD Insurance Group or generate 58.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. MSAD Insurance Group
Performance |
| Timeline |
| Merit Medical Systems |
| MSAD Insurance Group |
Merit Medical and MSAD Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and MSAD Insurance
The main advantage of trading using opposite Merit Medical and MSAD Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, MSAD Insurance 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 MSAD Insurance will offset losses from the drop in MSAD Insurance's long position.| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
| MSAD Insurance vs. ProSiebenSat1 Media AG | MSAD Insurance vs. iHeartMedia | MSAD Insurance vs. ITV PLC ADR | MSAD Insurance vs. Walt Disney |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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