Correlation Between Triplepoint Venture and Hercules Capital

Can any of the company-specific risk be diversified away by investing in both Triplepoint Venture and Hercules Capital 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 Triplepoint Venture and Hercules Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Triplepoint Venture Growth and Hercules Capital, you can compare the effects of market volatilities on Triplepoint Venture and Hercules Capital 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 Triplepoint Venture with a short position of Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triplepoint Venture and Hercules Capital.

Diversification Opportunities for Triplepoint Venture and Hercules Capital

0.94

Correlation Coefficient

Triplepoint Venture  Hercules Capital

Almost no diversification

The 3 months correlation between Triplepoint and Hercules is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Triplepoint Venture Growth and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital and Triplepoint Venture 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 Triplepoint Venture Growth are associated (or correlated) with Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Triplepoint Venture i.e., Triplepoint Venture and Hercules Capital go up and down completely randomly.

Pair Corralation between Triplepoint Venture and Hercules Capital

Given the investment horizon of 90 days Triplepoint Venture is expected to generate 1.73 times less return on investment than Hercules Capital. In addition to that, Triplepoint Venture is 1.17 times more volatile than Hercules Capital. It trades about 0.04 of its total potential returns per unit of risk. Hercules Capital is currently generating about 0.09 per unit of volatility. If you would invest  1,660  in Hercules Capital on February 6, 2025 and sell it today you would earn a total of  68.00  from holding Hercules Capital or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Triplepoint Venture Growth  vs.  Hercules Capital

Triplepoint Venture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Triplepoint Venture Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hercules Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hercules Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Triplepoint Venture and Hercules Capital

The main advantage of trading using opposite Triplepoint Venture and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triplepoint Venture position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.

The idea behind Triplepoint Venture Growth and Hercules Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.