Correlation Between Merit Medical and Blockchain Moon

Can any of the company-specific risk be diversified away by investing in both Merit Medical and Blockchain Moon 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 Blockchain Moon 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 Blockchain Moon Acquisition, you can compare the effects of market volatilities on Merit Medical and Blockchain Moon 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 Blockchain Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Blockchain Moon.

Diversification Opportunities for Merit Medical and Blockchain Moon

-0.64

Correlation Coefficient

Merit Medical  Blockchain Moon

Excellent diversification

The 3 months correlation between Merit and Blockchain is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Blockchain Moon Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Moon Acqu 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 Blockchain Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Moon Acqu has no effect on the direction of Merit Medical i.e., Merit Medical and Blockchain Moon go up and down completely randomly.

Pair Corralation between Merit Medical and Blockchain Moon

Given the investment horizon of 90 days Merit Medical is expected to generate 65.16 times less return on investment than Blockchain Moon. But when comparing it to its historical volatility, Merit Medical Systems is 36.58 times less risky than Blockchain Moon. It trades about 0.06 of its potential returns per unit of risk. Blockchain Moon Acquisition is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.49  in Blockchain Moon Acquisition on September 14, 2024 and sell it today you would lose (2.29) from holding Blockchain Moon Acquisition or give up 91.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	14.98%
Values	Daily Returns

Merit Medical Systems  vs.  Blockchain Moon Acquisition

Merit Medical Systems

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Merit Medical Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Merit Medical is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Blockchain Moon Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blockchain Moon Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Blockchain Moon is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Merit Medical and Blockchain Moon

The main advantage of trading using opposite Merit Medical and Blockchain Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Blockchain Moon 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 Blockchain Moon will offset losses from the drop in Blockchain Moon's long position.

The idea behind Merit Medical Systems and Blockchain Moon Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.