Correlation Between Merit Medical and SEALSQ Corp

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

Diversification Opportunities for Merit Medical and SEALSQ Corp

-0.38

Correlation Coefficient

Merit Medical  SEALSQ Corp

Very good diversification

The 3 months correlation between Merit and SEALSQ is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and SEALSQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALSQ Corp 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 SEALSQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALSQ Corp has no effect on the direction of Merit Medical i.e., Merit Medical and SEALSQ Corp go up and down completely randomly.

Pair Corralation between Merit Medical and SEALSQ Corp

Given the investment horizon of 90 days Merit Medical is expected to generate 4.56 times less return on investment than SEALSQ Corp. But when comparing it to its historical volatility, Merit Medical Systems is 9.89 times less risky than SEALSQ Corp. It trades about 0.05 of its potential returns per unit of risk. SEALSQ Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  490.00  in SEALSQ Corp on December 21, 2024 and sell it today you would lose (180.00) from holding SEALSQ Corp or give up 36.73% 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.  SEALSQ Corp

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.

SEALSQ Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Merit Medical and SEALSQ Corp

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

The idea behind Merit Medical Systems and SEALSQ Corp 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..