Correlation Between Zhihu and TriSalus Life

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

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

Diversification Opportunities for Zhihu and TriSalus Life

0.68

Correlation Coefficient

Zhihu  TriSalus Life

Poor diversification

The 3 months correlation between Zhihu and TriSalus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR 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 Zhihu 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 Zhihu Inc ADR 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 Zhihu i.e., Zhihu and TriSalus Life go up and down completely randomly.

Pair Corralation between Zhihu and TriSalus Life

Allowing for the 90-day total investment horizon Zhihu is expected to generate 1.4 times less return on investment than TriSalus Life. But when comparing it to its historical volatility, Zhihu Inc ADR is 2.06 times less risky than TriSalus Life. It trades about 0.15 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  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

Zhihu Inc ADR  vs.  TriSalus Life Sciences

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.

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.

Pair Trading with Zhihu and TriSalus Life

The main advantage of trading using opposite Zhihu and TriSalus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu 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 Zhihu Inc ADR 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.