Correlation Between Hercules Capital and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both Hercules Capital and Corsair Gaming 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 Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hercules Capital and Corsair Gaming, you can compare the effects of market volatilities on Hercules Capital and Corsair Gaming 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 Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hercules Capital and Corsair Gaming.
Diversification Opportunities for Hercules Capital and Corsair Gaming
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hercules and Corsair is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hercules Capital and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming 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 Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of Hercules Capital i.e., Hercules Capital and Corsair Gaming go up and down completely randomly.
Pair Corralation between Hercules Capital and Corsair Gaming
Assuming the 90 days horizon Hercules Capital is expected to generate 10.5 times less return on investment than Corsair Gaming. But when comparing it to its historical volatility, Hercules Capital is 2.58 times less risky than Corsair Gaming. It trades about 0.1 of its potential returns per unit of risk. Corsair Gaming is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 686.00 in Corsair Gaming on November 6, 2024 and sell it today you would earn a total of 206.00 from holding Corsair Gaming or generate 30.03% 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. Corsair Gaming
Performance |
| Timeline |
| Hercules Capital |
| Corsair Gaming |
Hercules Capital and Corsair Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hercules Capital and Corsair Gaming
The main advantage of trading using opposite Hercules Capital and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hercules Capital position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.| Hercules Capital vs. Salesforce | Hercules Capital vs. SALESFORCE INC CDR | Hercules Capital vs. Lamar Advertising | Hercules Capital vs. THAI BEVERAGE |
| Corsair Gaming vs. Molson Coors Beverage | Corsair Gaming vs. US FOODS HOLDING | Corsair Gaming vs. BRIT AMER TOBACCO | Corsair Gaming vs. United Natural Foods |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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