Correlation Between Merit Medical and Integra LifeSciences

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

Diversification Opportunities for Merit Medical and Integra LifeSciences

0.27

Correlation Coefficient

Merit Medical  Integra LifeSciences

Modest diversification

The 3 months correlation between Merit and Integra is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Merit Medical Systems and Integra LifeSciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra LifeSciences 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 Integra LifeSciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra LifeSciences has no effect on the direction of Merit Medical i.e., Merit Medical and Integra LifeSciences go up and down completely randomly.

Pair Corralation between Merit Medical and Integra LifeSciences

Given the investment horizon of 90 days Merit Medical Systems is expected to generate 0.4 times more return on investment than Integra LifeSciences. However, Merit Medical Systems is 2.48 times less risky than Integra LifeSciences. It trades about -0.09 of its potential returns per unit of risk. Integra LifeSciences Holdings is currently generating about -0.07 per unit of risk. If you would invest  9,461  in Merit Medical Systems on April 25, 2025 and sell it today you would lose (955.00) from holding Merit Medical Systems or give up 10.09% 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.  Integra LifeSciences Holdings

Merit Medical Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Merit Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Integra LifeSciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integra LifeSciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Merit Medical and Integra LifeSciences

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

The idea behind Merit Medical Systems and Integra LifeSciences Holdings 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.