Correlation Between Merit Medical and AtriCure
Can any of the company-specific risk be diversified away by investing in both Merit Medical and AtriCure 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 AtriCure 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 AtriCure, you can compare the effects of market volatilities on Merit Medical and AtriCure 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 AtriCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merit Medical and AtriCure.
Diversification Opportunities for Merit Medical and AtriCure
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Merit and AtriCure is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure 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 AtriCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AtriCure has no effect on the direction of Merit Medical i.e., Merit Medical and AtriCure go up and down completely randomly.
Pair Corralation between Merit Medical and AtriCure
Given the investment horizon of 90 days Merit Medical Systems is expected to under-perform the AtriCure. But the stock apears to be less risky and, when comparing its historical volatility, Merit Medical Systems is 1.37 times less risky than AtriCure. The stock trades about -0.08 of its potential returns per unit of risk. The AtriCure is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,509 in AtriCure on March 24, 2025 and sell it today you would lose (369.00) from holding AtriCure or give up 10.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merit Medical Systems vs. AtriCure
Performance |
| Timeline |
| Merit Medical Systems |
| AtriCure |
Merit Medical and AtriCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merit Medical and AtriCure
The main advantage of trading using opposite Merit Medical and AtriCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merit Medical position performs unexpectedly, AtriCure 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 AtriCure will offset losses from the drop in AtriCure's long position.| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |