Correlation Between Crédit Agricole and Merit Medical

Can any of the company-specific risk be diversified away by investing in both Crédit Agricole and Merit Medical 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 Crédit Agricole and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crdit Agricole SA and Merit Medical Systems, you can compare the effects of market volatilities on Crédit Agricole and Merit Medical 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 Crédit Agricole with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crédit Agricole and Merit Medical.

Diversification Opportunities for Crédit Agricole and Merit Medical

-0.78

Correlation Coefficient

Crédit Agricole  Merit Medical

Pay attention - limited upside

The 3 months correlation between Crédit and Merit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Crdit Agricole SA and Merit Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merit Medical Systems and Crédit Agricole 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 Crdit Agricole SA are associated (or correlated) with Merit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merit Medical Systems has no effect on the direction of Crédit Agricole i.e., Crédit Agricole and Merit Medical go up and down completely randomly.

Pair Corralation between Crédit Agricole and Merit Medical

Assuming the 90 days horizon Crdit Agricole SA is expected to generate 0.82 times more return on investment than Merit Medical. However, Crdit Agricole SA is 1.22 times less risky than Merit Medical. It trades about 0.08 of its potential returns per unit of risk. Merit Medical Systems is currently generating about -0.21 per unit of risk. If you would invest  1,323  in Crdit Agricole SA on October 9, 2024 and sell it today you would earn a total of  17.00  from holding Crdit Agricole SA or generate 1.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Crdit Agricole SA  vs.  Merit Medical Systems

Crdit Agricole SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crdit Agricole SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Crédit Agricole is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Merit Medical Systems

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Merit Medical Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Merit Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Crédit Agricole and Merit Medical

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

The idea behind Crdit Agricole SA and Merit Medical Systems 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.