Correlation Between Hercules Capital and HEMISPHERE EGY
Can any of the company-specific risk be diversified away by investing in both Hercules Capital and HEMISPHERE EGY 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 HEMISPHERE EGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hercules Capital and HEMISPHERE EGY, you can compare the effects of market volatilities on Hercules Capital and HEMISPHERE EGY 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 HEMISPHERE EGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hercules Capital and HEMISPHERE EGY.
Diversification Opportunities for Hercules Capital and HEMISPHERE EGY
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hercules and HEMISPHERE is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hercules Capital and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY 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 HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of Hercules Capital i.e., Hercules Capital and HEMISPHERE EGY go up and down completely randomly.
Pair Corralation between Hercules Capital and HEMISPHERE EGY
Assuming the 90 days horizon Hercules Capital is expected to generate 1.0 times less return on investment than HEMISPHERE EGY. In addition to that, Hercules Capital is 1.31 times more volatile than HEMISPHERE EGY. It trades about 0.07 of its total potential returns per unit of risk. HEMISPHERE EGY is currently generating about 0.09 per unit of volatility. If you would invest 68.00 in HEMISPHERE EGY on September 26, 2024 and sell it today you would earn a total of 55.00 from holding HEMISPHERE EGY or generate 80.88% 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. HEMISPHERE EGY
Performance |
| Timeline |
| Hercules Capital |
| HEMISPHERE EGY |
Hercules Capital and HEMISPHERE EGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hercules Capital and HEMISPHERE EGY
The main advantage of trading using opposite Hercules Capital and HEMISPHERE EGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hercules Capital position performs unexpectedly, HEMISPHERE EGY 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 HEMISPHERE EGY will offset losses from the drop in HEMISPHERE EGY's long position.| Hercules Capital vs. Harmony Gold Mining | Hercules Capital vs. Evolution Mining Limited | Hercules Capital vs. ORMAT TECHNOLOGIES | Hercules Capital vs. GRIFFIN MINING LTD |
| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Microsoft | HEMISPHERE EGY vs. Microsoft |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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