Correlation Between Masimo and TriSalus Life

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

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

Diversification Opportunities for Masimo and TriSalus Life

-0.49

Correlation Coefficient

Masimo  TriSalus Life

Very good diversification

The 3 months correlation between Masimo and TriSalus is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Masimo 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 Masimo 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 Masimo 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 Masimo i.e., Masimo and TriSalus Life go up and down completely randomly.

Pair Corralation between Masimo and TriSalus Life

Given the investment horizon of 90 days Masimo is expected to generate 0.17 times more return on investment than TriSalus Life. However, Masimo is 5.89 times less risky than TriSalus Life. It trades about 0.06 of its potential returns per unit of risk. TriSalus Life Sciences is currently generating about -0.06 per unit of risk. If you would invest  16,952  in Masimo on October 9, 2024 and sell it today you would earn a total of  238.00  from holding Masimo or generate 1.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Masimo  vs.  TriSalus Life Sciences

Masimo

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Masimo are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Masimo demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 inconsistent performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Masimo and TriSalus Life

The main advantage of trading using opposite Masimo and TriSalus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masimo 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 Masimo 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.