Correlation Between TriSalus Life and Zhihu

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

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

Diversification Opportunities for TriSalus Life and Zhihu

0.68

Correlation Coefficient

TriSalus Life  Zhihu

Poor diversification

The 3 months correlation between TriSalus and Zhihu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding TriSalus Life Sciences and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR and TriSalus Life 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 TriSalus Life Sciences are associated (or correlated) with Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of TriSalus Life i.e., TriSalus Life and Zhihu go up and down completely randomly.

Pair Corralation between TriSalus Life and Zhihu

Assuming the 90 days horizon TriSalus Life Sciences is expected to generate 2.06 times more return on investment than Zhihu. However, TriSalus Life is 2.06 times more volatile than Zhihu Inc ADR. It trades about 0.1 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.15 per unit of risk. If you would invest  97.00  in TriSalus Life Sciences on December 20, 2024 and sell it today you would earn a total of  36.00  from holding TriSalus Life Sciences or generate 37.11% return on investment over 90 days.

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

TriSalus Life Sciences  vs.  Zhihu Inc ADR

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 8 (%) 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.

Zhihu Inc ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zhihu Inc ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, Zhihu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TriSalus Life and Zhihu

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

The idea behind TriSalus Life Sciences and Zhihu Inc ADR 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..