Correlation Between Pembina Pipeline and TriSalus Life

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

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

Diversification Opportunities for Pembina Pipeline and TriSalus Life

0.59

Correlation Coefficient

Pembina Pipeline  TriSalus Life

Very weak diversification

The 3 months correlation between Pembina and TriSalus is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline i.e., Pembina Pipeline and TriSalus Life go up and down completely randomly.

Pair Corralation between Pembina Pipeline and TriSalus Life

Assuming the 90 days horizon Pembina Pipeline is expected to generate 52.02 times less return on investment than TriSalus Life. But when comparing it to its historical volatility, Pembina Pipeline is 115.8 times less risky than TriSalus Life. It trades about 0.22 of its potential returns per unit of risk. 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	Weak
Accuracy	100.0%
Values	Daily Returns

Pembina Pipeline  vs.  TriSalus Life Sciences

Pembina Pipeline

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembina Pipeline has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pembina Pipeline is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Pembina Pipeline and TriSalus Life

The main advantage of trading using opposite Pembina Pipeline and TriSalus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline 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 Pembina Pipeline 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.