Correlation Between Hercules Capital and Tradeweb Markets
Can any of the company-specific risk be diversified away by investing in both Hercules Capital and Tradeweb Markets 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 Hercules Capital and Tradeweb Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hercules Capital and Tradeweb Markets, you can compare the effects of market volatilities on Hercules Capital and Tradeweb Markets 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 Hercules Capital with a short position of Tradeweb Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hercules Capital and Tradeweb Markets.
Diversification Opportunities for Hercules Capital and Tradeweb Markets
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hercules and Tradeweb is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hercules Capital and Tradeweb Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradeweb Markets and Hercules Capital 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 Hercules Capital are associated (or correlated) with Tradeweb Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradeweb Markets has no effect on the direction of Hercules Capital i.e., Hercules Capital and Tradeweb Markets go up and down completely randomly.
Pair Corralation between Hercules Capital and Tradeweb Markets
Assuming the 90 days horizon Hercules Capital is expected to generate 0.95 times more return on investment than Tradeweb Markets. However, Hercules Capital is 1.05 times less risky than Tradeweb Markets. It trades about 0.2 of its potential returns per unit of risk. Tradeweb Markets is currently generating about -0.08 per unit of risk. If you would invest 1,799 in Hercules Capital on October 30, 2024 and sell it today you would earn a total of 211.00 from holding Hercules Capital or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hercules Capital vs. Tradeweb Markets
Performance |
| Timeline |
| Hercules Capital |
| Tradeweb Markets |
Hercules Capital and Tradeweb Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hercules Capital and Tradeweb Markets
The main advantage of trading using opposite Hercules Capital and Tradeweb Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hercules Capital position performs unexpectedly, Tradeweb Markets 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 Tradeweb Markets will offset losses from the drop in Tradeweb Markets' long position.| Hercules Capital vs. High Liner Foods | Hercules Capital vs. AGF Management Limited | Hercules Capital vs. Perdoceo Education | Hercules Capital vs. Cleanaway Waste Management |
| Tradeweb Markets vs. Monument Mining Limited | Tradeweb Markets vs. Ultra Clean Holdings | Tradeweb Markets vs. FIRST SHIP LEASE | Tradeweb Markets vs. Yanzhou Coal Mining |
Check out your portfolio center.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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