Correlation Between SmarTone Telecommunicatio and Merit Medical
Can any of the company-specific risk be diversified away by investing in both SmarTone Telecommunicatio 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 SmarTone Telecommunicatio and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmarTone Telecommunications Holdings and Merit Medical Systems, you can compare the effects of market volatilities on SmarTone Telecommunicatio 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 SmarTone Telecommunicatio with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmarTone Telecommunicatio and Merit Medical.
Diversification Opportunities for SmarTone Telecommunicatio and Merit Medical
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SmarTone and Merit is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SmarTone Telecommunications Ho 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 SmarTone Telecommunicatio 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 SmarTone Telecommunications Holdings 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 SmarTone Telecommunicatio i.e., SmarTone Telecommunicatio and Merit Medical go up and down completely randomly.
Pair Corralation between SmarTone Telecommunicatio and Merit Medical
Assuming the 90 days horizon SmarTone Telecommunications Holdings is expected to generate 0.49 times more return on investment than Merit Medical. However, SmarTone Telecommunications Holdings is 2.05 times less risky than Merit Medical. It trades about 0.16 of its potential returns per unit of risk. Merit Medical Systems is currently generating about -0.16 per unit of risk. If you would invest 47.00 in SmarTone Telecommunications Holdings on April 23, 2025 and sell it today you would earn a total of 2.00 from holding SmarTone Telecommunications Holdings or generate 4.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SmarTone Telecommunications Ho vs. Merit Medical Systems
Performance |
Timeline |
SmarTone Telecommunicatio |
Merit Medical Systems |
SmarTone Telecommunicatio and Merit Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SmarTone Telecommunicatio and Merit Medical
The main advantage of trading using opposite SmarTone Telecommunicatio and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmarTone Telecommunicatio 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.SmarTone Telecommunicatio vs. GOLDGROUP MINING INC | SmarTone Telecommunicatio vs. Aya Gold Silver | SmarTone Telecommunicatio vs. Charter Communications | SmarTone Telecommunicatio vs. RESMINING UNSPADR10 |
Merit Medical vs. Renesas Electronics | Merit Medical vs. METHODE ELECTRONICS | Merit Medical vs. SmarTone Telecommunications Holdings | Merit Medical vs. KCE Electronics Public |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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