Correlation Between HNI Corp and TriSalus Life

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

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

Diversification Opportunities for HNI Corp and TriSalus Life

0.06

Correlation Coefficient

HNI Corp  TriSalus Life

Significant diversification

The 3 months correlation between HNI and TriSalus is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp 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 HNI Corp 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 HNI Corp 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 HNI Corp i.e., HNI Corp and TriSalus Life go up and down completely randomly.

Pair Corralation between HNI Corp and TriSalus Life

Considering the 90-day investment horizon HNI Corp is expected to under-perform the TriSalus Life. But the stock apears to be less risky and, when comparing its historical volatility, HNI Corp is 5.61 times less risky than TriSalus Life. The stock trades about -0.6 of its potential returns per unit of risk. The TriSalus Life Sciences is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  93.00  in TriSalus Life Sciences on October 11, 2024 and sell it today you would earn a total of  9.00  from holding TriSalus Life Sciences or generate 9.68% return on investment over 90 days.

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

HNI Corp  vs.  TriSalus Life Sciences

HNI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HNI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

TriSalus Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TriSalus Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, TriSalus Life is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with HNI Corp and TriSalus Life

The main advantage of trading using opposite HNI Corp and TriSalus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp 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 HNI Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.