Correlation Between Treace Medical and TriSalus Life

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

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

Diversification Opportunities for Treace Medical and TriSalus Life

-0.41

Correlation Coefficient

Treace Medical  TriSalus Life

Very good diversification

The 3 months correlation between Treace and TriSalus is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Treace Medical Concepts 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 Treace Medical 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 Treace Medical Concepts 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 Treace Medical i.e., Treace Medical and TriSalus Life go up and down completely randomly.

Pair Corralation between Treace Medical and TriSalus Life

Given the investment horizon of 90 days Treace Medical Concepts is expected to generate 0.68 times more return on investment than TriSalus Life. However, Treace Medical Concepts is 1.48 times less risky than TriSalus Life. It trades about 0.14 of its potential returns per unit of risk. TriSalus Life Sciences is currently generating about 0.01 per unit of risk. If you would invest  524.00  in Treace Medical Concepts on October 7, 2024 and sell it today you would earn a total of  266.00  from holding Treace Medical Concepts or generate 50.76% return on investment over 90 days.

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

Treace Medical Concepts  vs.  TriSalus Life Sciences

Treace Medical Concepts

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Treace Medical Concepts are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Treace Medical 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 fairly stable forward indicators, TriSalus Life is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Treace Medical and TriSalus Life

The main advantage of trading using opposite Treace Medical and TriSalus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treace Medical 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 Treace Medical Concepts 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.