Correlation Between Merit Medical and Aperture Health

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

Diversification Opportunities for Merit Medical and Aperture Health

0.0

Correlation Coefficient

Merit Medical  Aperture Health

Pay attention - limited upside

The 3 months correlation between Merit and Aperture is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Aperture Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperture Health 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 Aperture Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperture Health has no effect on the direction of Merit Medical i.e., Merit Medical and Aperture Health go up and down completely randomly.

Pair Corralation between Merit Medical and Aperture Health

If you would invest  9,822  in Merit Medical Systems on December 20, 2024 and sell it today you would earn a total of  306.00  from holding Merit Medical Systems or generate 3.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Merit Medical Systems  vs.  Aperture Health

Merit Medical Systems

Risk-Adjusted Performance

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 current stock price confusion, may contribute to short-horizon losses for the traders.

Aperture Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aperture Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aperture Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Merit Medical and Aperture Health

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

The idea behind Merit Medical Systems and Aperture Health 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.