Correlation Between Merit Medical and RadNet
Can any of the company-specific risk be diversified away by investing in both Merit Medical and RadNet 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 RadNet 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 RadNet Inc, you can compare the effects of market volatilities on Merit Medical and RadNet 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 RadNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and RadNet.
Diversification Opportunities for Merit Medical and RadNet
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merit and RadNet is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc 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 RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of Merit Medical i.e., Merit Medical and RadNet go up and down completely randomly.
Pair Corralation between Merit Medical and RadNet
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.63 times more return on investment than RadNet. However, Merit Medical Systems is 1.59 times less risky than RadNet. It trades about -0.02 of its potential returns per unit of risk. RadNet Inc is currently generating about -0.27 per unit of risk. If you would invest 10,483 in Merit Medical Systems on December 1, 2024 and sell it today you would lose (279.00) from holding Merit Medical Systems or give up 2.66% 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. RadNet Inc
Performance |
Timeline |
Merit Medical Systems |
RadNet Inc |
Merit Medical and RadNet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merit Medical and RadNet
The main advantage of trading using opposite Merit Medical and RadNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, RadNet 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 RadNet will offset losses from the drop in RadNet's long position.Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
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 CEOs Directory module to screen CEOs from public companies around the world.
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