Correlation Between Merit Medical and Captivision Ordinary

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

Diversification Opportunities for Merit Medical and Captivision Ordinary

-0.72

Correlation Coefficient

Merit Medical  Captivision Ordinary

Pay attention - limited upside

The 3 months correlation between Merit and Captivision is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Captivision Ordinary Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Captivision Ordinary 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 Captivision Ordinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Captivision Ordinary has no effect on the direction of Merit Medical i.e., Merit Medical and Captivision Ordinary go up and down completely randomly.

Pair Corralation between Merit Medical and Captivision Ordinary

Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.15 times more return on investment than Captivision Ordinary. However, Merit Medical Systems is 6.51 times less risky than Captivision Ordinary. It trades about 0.05 of its potential returns per unit of risk. Captivision Ordinary Shares is currently generating about -0.2 per unit of risk. If you would invest  9,964  in Merit Medical Systems on September 15, 2024 and sell it today you would earn a total of  312.00  from holding Merit Medical Systems or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Merit Medical Systems  vs.  Captivision Ordinary Shares

Merit Medical Systems

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Merit Medical Systems are ranked lower than 3 (%) 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.

Captivision Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Captivision Ordinary Shares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Merit Medical and Captivision Ordinary

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

The idea behind Merit Medical Systems and Captivision Ordinary Shares 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.