Correlation Between Energy and TriSalus Life

Can any of the company-specific risk be diversified away by investing in both Energy and TriSalus Life 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 Energy and TriSalus Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Energy and Environmental and TriSalus Life Sciences, you can compare the effects of market volatilities on Energy and TriSalus Life 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 Energy with a short position of TriSalus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy and TriSalus Life.

Diversification Opportunities for Energy and TriSalus Life

-0.7

Correlation Coefficient

Energy  TriSalus Life

Excellent diversification

The 3 months correlation between Energy and TriSalus is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Energy and Environmental and TriSalus Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriSalus Life Sciences and Energy 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 Energy and Environmental are associated (or correlated) with TriSalus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriSalus Life Sciences has no effect on the direction of Energy i.e., Energy and TriSalus Life go up and down completely randomly.

Pair Corralation between Energy and TriSalus Life

Given the investment horizon of 90 days Energy is expected to generate 8.58 times less return on investment than TriSalus Life. But when comparing it to its historical volatility, Energy and Environmental is 1.82 times less risky than TriSalus Life. It trades about 0.02 of its potential returns per unit of risk. TriSalus Life Sciences is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  91.00  in TriSalus Life Sciences on December 21, 2024 and sell it today you would earn a total of  42.00  from holding TriSalus Life Sciences or generate 46.15% return on investment over 90 days.

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

Energy and Environmental  vs.  TriSalus Life Sciences

Energy and Environmental

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Energy and Environmental are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TriSalus Life Sciences

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TriSalus Life Sciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, TriSalus Life showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Energy and TriSalus Life

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

The idea behind Energy and Environmental and TriSalus Life Sciences 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.