Correlation Between Merit Medical and Teleflex Incorporated

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

Diversification Opportunities for Merit Medical and Teleflex Incorporated

0.14

Correlation Coefficient

Merit Medical  Teleflex Incorporated

Average diversification

The 3 months correlation between Merit and Teleflex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated 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 Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of Merit Medical i.e., Merit Medical and Teleflex Incorporated go up and down completely randomly.

Pair Corralation between Merit Medical and Teleflex Incorporated

Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.58 times more return on investment than Teleflex Incorporated. However, Merit Medical Systems is 1.73 times less risky than Teleflex Incorporated. It trades about 0.1 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.09 per unit of risk. If you would invest  8,293  in Merit Medical Systems on August 14, 2025 and sell it today you would earn a total of  519.00  from holding Merit Medical Systems or generate 6.26% return on investment over 90 days.

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

Merit Medical Systems  vs.  Teleflex Incorporated

Merit Medical Systems

Risk-Adjusted Performance

Soft

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

Teleflex Incorporated

Risk-Adjusted Performance

Weakest

Over the last 90 days Teleflex Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Teleflex Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Merit Medical and Teleflex Incorporated

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

The idea behind Merit Medical Systems and Teleflex Incorporated 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.