Correlation Between Merit Medical and Brenmiller Energy
Can any of the company-specific risk be diversified away by investing in both Merit Medical and Brenmiller Energy 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 Brenmiller Energy 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 Brenmiller Energy Ltd, you can compare the effects of market volatilities on Merit Medical and Brenmiller Energy 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 Brenmiller Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and Brenmiller Energy.
Diversification Opportunities for Merit Medical and Brenmiller Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and Brenmiller is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy 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 Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Merit Medical i.e., Merit Medical and Brenmiller Energy go up and down completely randomly.
Pair Corralation between Merit Medical and Brenmiller Energy
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.31 times more return on investment than Brenmiller Energy. However, Merit Medical Systems is 3.23 times less risky than Brenmiller Energy. It trades about -0.01 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about -0.03 per unit of risk. If you would invest 9,960 in Merit Medical Systems on September 24, 2024 and sell it today you would lose (138.00) from holding Merit Medical Systems or give up 1.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Merit Medical Systems vs. Brenmiller Energy Ltd
Performance |
Timeline |
Merit Medical Systems |
Brenmiller Energy |
Merit Medical and Brenmiller Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merit Medical and Brenmiller Energy
The main advantage of trading using opposite Merit Medical and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, Brenmiller Energy 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 Brenmiller Energy will offset losses from the drop in Brenmiller Energy's long position.Merit Medical vs. Cigna Corp | Merit Medical vs. Definitive Healthcare Corp | Merit Medical vs. Guardant Health | Merit Medical vs. Laboratory of |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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