Correlation Between Western Acquisition and TriSalus Life

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

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

Diversification Opportunities for Western Acquisition and TriSalus Life

0.29

Correlation Coefficient

Western Acquisition  TriSalus Life

Modest diversification

The 3 months correlation between Western and TriSalus is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures 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 Western Acquisition 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 Western Acquisition Ventures 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 Western Acquisition i.e., Western Acquisition and TriSalus Life go up and down completely randomly.

Pair Corralation between Western Acquisition and TriSalus Life

Given the investment horizon of 90 days Western Acquisition Ventures is expected to under-perform the TriSalus Life. But the stock apears to be less risky and, when comparing its historical volatility, Western Acquisition Ventures is 3.45 times less risky than TriSalus Life. The stock trades about -0.15 of its potential returns per unit of risk. The TriSalus Life Sciences is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  131.00  in TriSalus Life Sciences on October 25, 2024 and sell it today you would lose (16.00) from holding TriSalus Life Sciences or give up 12.21% of portfolio value over 90 days.

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

Western Acquisition Ventures  vs.  TriSalus Life Sciences

Western Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Acquisition Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

TriSalus Life Sciences

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TriSalus Life Sciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, TriSalus Life may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Western Acquisition and TriSalus Life

The main advantage of trading using opposite Western Acquisition and TriSalus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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 Western Acquisition Ventures 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.