Correlation Between Merit Medical and High Roller

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

Diversification Opportunities for Merit Medical and High Roller

-0.05

Correlation Coefficient

Merit Medical  High Roller

Good diversification

The 3 months correlation between Merit and High is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and High Roller Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Roller Technologies, 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 High Roller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Roller Technologies, has no effect on the direction of Merit Medical i.e., Merit Medical and High Roller go up and down completely randomly.

Pair Corralation between Merit Medical and High Roller

Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.16 times more return on investment than High Roller. However, Merit Medical Systems is 6.29 times less risky than High Roller. It trades about 0.05 of its potential returns per unit of risk. High Roller Technologies, is currently generating about -0.07 per unit of risk. If you would invest  9,964  in Merit Medical Systems on September 15, 2024 and sell it today you would earn a total of  312.00  from holding Merit Medical Systems or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.81%
Values	Daily Returns

Merit Medical Systems  vs.  High Roller Technologies,

Merit Medical Systems

Risk-Adjusted Performance

3 of 100

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

High Roller Technologies,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Roller Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Merit Medical and High Roller

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

The idea behind Merit Medical Systems and High Roller Technologies, 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.