Correlation Between Merit Medical and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Merit Medical and SunLink 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 SunLink 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 SunLink Health Systems, you can compare the effects of market volatilities on Merit Medical and SunLink 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and SunLink Health.
Diversification Opportunities for Merit Medical and SunLink Health
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and SunLink is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Merit Medical i.e., Merit Medical and SunLink Health go up and down completely randomly.
Pair Corralation between Merit Medical and SunLink Health
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.27 times more return on investment than SunLink Health. However, Merit Medical Systems is 3.7 times less risky than SunLink Health. It trades about 0.13 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.01 per unit of risk. If you would invest 9,616 in Merit Medical Systems on September 13, 2024 and sell it today you would earn a total of 936.00 from holding Merit Medical Systems or generate 9.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Merit Medical Systems vs. SunLink Health Systems
Performance |
Timeline |
Merit Medical Systems |
SunLink Health Systems |
Merit Medical and SunLink Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merit Medical and SunLink Health
The main advantage of trading using opposite Merit Medical and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, SunLink 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 SunLink Health will offset losses from the drop in SunLink Health's long position.Merit Medical vs. Avita Medical | Merit Medical vs. Sight Sciences | Merit Medical vs. Treace Medical Concepts | Merit Medical vs. Neuropace |
SunLink Health vs. ASGN Inc | SunLink Health vs. Kforce Inc | SunLink Health vs. Kelly Services A | SunLink Health vs. AMN Healthcare Services |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |