Correlation Between Hercules Capital and Far East
Can any of the company-specific risk be diversified away by investing in both Hercules Capital and Far East 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 Far East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hercules Capital and Far East Horizon, you can compare the effects of market volatilities on Hercules Capital and Far East 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 Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hercules Capital and Far East.
Diversification Opportunities for Hercules Capital and Far East
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hercules and Far is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hercules Capital and Far East Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Horizon 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Horizon has no effect on the direction of Hercules Capital i.e., Hercules Capital and Far East go up and down completely randomly.
Pair Corralation between Hercules Capital and Far East
Assuming the 90 days horizon Hercules Capital is expected to generate 1.5 times more return on investment than Far East. However, Hercules Capital is 1.5 times more volatile than Far East Horizon. It trades about 0.12 of its potential returns per unit of risk. Far East Horizon is currently generating about 0.01 per unit of risk. If you would invest 1,854 in Hercules Capital on October 13, 2024 and sell it today you would earn a total of 66.00 from holding Hercules Capital or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Hercules Capital vs. Far East Horizon
Performance |
| Timeline |
| Hercules Capital |
| Far East Horizon |
Hercules Capital and Far East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hercules Capital and Far East
The main advantage of trading using opposite Hercules Capital and Far East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hercules Capital position performs unexpectedly, Far East 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 Far East will offset losses from the drop in Far East's long position.| Hercules Capital vs. SALESFORCE INC CDR | Hercules Capital vs. ASURE SOFTWARE | Hercules Capital vs. Take Two Interactive Software | Hercules Capital vs. AXWAY SOFTWARE EO |
| Far East vs. WisdomTree Investments | Far East vs. Virtus Investment Partners | Far East vs. BOSTON BEER A | Far East vs. China Resources Beer |
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 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.
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