Correlation Between Merit Medical and BAXALTA
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By analyzing existing cross correlation between Merit Medical Systems and BAXALTA INC 525, you can compare the effects of market volatilities on Merit Medical and BAXALTA 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 BAXALTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and BAXALTA.
Diversification Opportunities for Merit Medical and BAXALTA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merit and BAXALTA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and BAXALTA INC 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAXALTA INC 525 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 BAXALTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAXALTA INC 525 has no effect on the direction of Merit Medical i.e., Merit Medical and BAXALTA go up and down completely randomly.
Pair Corralation between Merit Medical and BAXALTA
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 1.25 times more return on investment than BAXALTA. However, Merit Medical is 1.25 times more volatile than BAXALTA INC 525. It trades about 0.13 of its potential returns per unit of risk. BAXALTA INC 525 is currently generating about 0.06 per unit of risk. If you would invest 7,509 in Merit Medical Systems on September 24, 2024 and sell it today you would earn a total of 2,313 from holding Merit Medical Systems or generate 30.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 54.82% |
Values | Daily Returns |
Merit Medical Systems vs. BAXALTA INC 525
Performance |
Timeline |
Merit Medical Systems |
BAXALTA INC 525 |
Merit Medical and BAXALTA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merit Medical and BAXALTA
The main advantage of trading using opposite Merit Medical and BAXALTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, BAXALTA 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 BAXALTA will offset losses from the drop in BAXALTA's long position.Merit Medical vs. Cigna Corp | Merit Medical vs. Definitive Healthcare Corp | Merit Medical vs. Guardant Health | Merit Medical vs. Laboratory of |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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