Correlation Between Hercules Capital and Tokyu Construction
Can any of the company-specific risk be diversified away by investing in both Hercules Capital and Tokyu Construction 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 Tokyu Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hercules Capital and Tokyu Construction Co, you can compare the effects of market volatilities on Hercules Capital and Tokyu Construction 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 Tokyu Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hercules Capital and Tokyu Construction.
Diversification Opportunities for Hercules Capital and Tokyu Construction
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hercules and Tokyu is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hercules Capital and Tokyu Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu Construction 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 Tokyu Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu Construction has no effect on the direction of Hercules Capital i.e., Hercules Capital and Tokyu Construction go up and down completely randomly.
Pair Corralation between Hercules Capital and Tokyu Construction
Assuming the 90 days horizon Hercules Capital is expected to generate 1.84 times more return on investment than Tokyu Construction. However, Hercules Capital is 1.84 times more volatile than Tokyu Construction Co. It trades about 0.19 of its potential returns per unit of risk. Tokyu Construction Co is currently generating about 0.06 per unit of risk. If you would invest 1,802 in Hercules Capital on October 28, 2024 and sell it today you would earn a total of 200.00 from holding Hercules Capital or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hercules Capital vs. Tokyu Construction Co
Performance |
| Timeline |
| Hercules Capital |
| Tokyu Construction |
Hercules Capital and Tokyu Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hercules Capital and Tokyu Construction
The main advantage of trading using opposite Hercules Capital and Tokyu Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hercules Capital position performs unexpectedly, Tokyu Construction 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 Tokyu Construction will offset losses from the drop in Tokyu Construction's long position.| Hercules Capital vs. Corsair Gaming | Hercules Capital vs. Delta Air Lines | Hercules Capital vs. American Airlines Group | Hercules Capital vs. Ryanair Holdings plc |
| Tokyu Construction vs. Prosiebensat 1 Media | Tokyu Construction vs. PROSIEBENSAT1 MEDIADR4 | Tokyu Construction vs. Townsquare Media | Tokyu Construction vs. Penn National Gaming |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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