Correlation Between Innovative Eyewear and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Innovative Eyewear 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 Innovative Eyewear and Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Eyewear and Merit Medical Systems, you can compare the effects of market volatilities on Innovative Eyewear 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 Innovative Eyewear with a short position of Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Eyewear and Merit Medical.
Diversification Opportunities for Innovative Eyewear and Merit Medical
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innovative and Merit is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Eyewear 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 Innovative Eyewear 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 Innovative Eyewear 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 Innovative Eyewear i.e., Innovative Eyewear and Merit Medical go up and down completely randomly.
Pair Corralation between Innovative Eyewear and Merit Medical
Given the investment horizon of 90 days Innovative Eyewear is expected to generate 12.62 times more return on investment than Merit Medical. However, Innovative Eyewear is 12.62 times more volatile than Merit Medical Systems. It trades about 0.03 of its potential returns per unit of risk. Merit Medical Systems is currently generating about 0.02 per unit of risk. If you would invest 1,700 in Innovative Eyewear on March 25, 2025 and sell it today you would lose (1,454) from holding Innovative Eyewear or give up 85.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Eyewear vs. Merit Medical Systems
Performance |
| Timeline |
| Innovative Eyewear |
| Merit Medical Systems |
Innovative Eyewear and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Eyewear and Merit Medical
The main advantage of trading using opposite Innovative Eyewear and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Eyewear 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.| Innovative Eyewear vs. Sharps Technology | Innovative Eyewear vs. JIN MEDICAL INTERNATIONAL | Innovative Eyewear vs. Nexgel Inc | Innovative Eyewear vs. GlucoTrack |
| Merit Medical vs. Teleflex Incorporated | Merit Medical vs. The Cooper Companies, | Merit Medical vs. West Pharmaceutical Services | Merit Medical vs. ICU Medical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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