Correlation Between Merit Medical and Aris Mining
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Aris Mining 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 Aris Mining 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 Aris Mining, you can compare the effects of market volatilities on Merit Medical and Aris Mining 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 Aris Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Aris Mining.
Diversification Opportunities for Merit Medical and Aris Mining
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and Aris is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Aris Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Mining 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 Aris Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Mining has no effect on the direction of Merit Medical i.e., Merit Medical and Aris Mining go up and down completely randomly.
Pair Corralation between Merit Medical and Aris Mining
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.52 times more return on investment than Aris Mining. However, Merit Medical Systems is 1.93 times less risky than Aris Mining. It trades about 0.26 of its potential returns per unit of risk. Aris Mining is currently generating about 0.08 per unit of risk. If you would invest 9,808 in Merit Medical Systems on October 25, 2024 and sell it today you would earn a total of 665.00 from holding Merit Medical Systems or generate 6.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Merit Medical Systems vs. Aris Mining
Performance |
Timeline |
Merit Medical Systems |
Aris Mining |
Merit Medical and Aris Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merit Medical and Aris Mining
The main advantage of trading using opposite Merit Medical and Aris Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Aris Mining 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 Aris Mining will offset losses from the drop in Aris Mining'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 |
Aris Mining vs. Scholastic | Aris Mining vs. Willamette Valley Vineyards | Aris Mining vs. Constellation Brands Class | Aris Mining vs. SNDL Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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