Correlation Between Merit Medical and LENNAR
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By analyzing existing cross correlation between Merit Medical Systems and LENNAR P 525, you can compare the effects of market volatilities on Merit Medical and LENNAR 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 LENNAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and LENNAR.
Diversification Opportunities for Merit Medical and LENNAR
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merit and LENNAR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and LENNAR P 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENNAR P 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 LENNAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENNAR P 525 has no effect on the direction of Merit Medical i.e., Merit Medical and LENNAR go up and down completely randomly.
Pair Corralation between Merit Medical and LENNAR
Given the investment horizon of 90 days Merit Medical Systems is expected to generate 4.97 times more return on investment than LENNAR. However, Merit Medical is 4.97 times more volatile than LENNAR P 525. It trades about 0.0 of its potential returns per unit of risk. LENNAR P 525 is currently generating about -0.09 per unit of risk. If you would invest 9,818 in Merit Medical Systems on September 25, 2024 and sell it today you would lose (10.00) from holding Merit Medical Systems or give up 0.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 92.19% |
Values | Daily Returns |
Merit Medical Systems vs. LENNAR P 525
Performance |
Timeline |
Merit Medical Systems |
LENNAR P 525 |
Merit Medical and LENNAR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merit Medical and LENNAR
The main advantage of trading using opposite Merit Medical and LENNAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, LENNAR 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 LENNAR will offset losses from the drop in LENNAR'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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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