Correlation Between Bank of Montreal and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Bank of Montreal and Senvest 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 Bank of Montreal and Senvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Montreal and Senvest Capital, you can compare the effects of market volatilities on Bank of Montreal and Senvest 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 Bank of Montreal with a short position of Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Montreal and Senvest Capital.
Diversification Opportunities for Bank of Montreal and Senvest Capital
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Senvest is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Bank of Montreal 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 Bank of Montreal are associated (or correlated) with Senvest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senvest Capital has no effect on the direction of Bank of Montreal i.e., Bank of Montreal and Senvest Capital go up and down completely randomly.
Pair Corralation between Bank of Montreal and Senvest Capital
Assuming the 90 days trading horizon Bank of Montreal is expected to generate 16.64 times less return on investment than Senvest Capital. In addition to that, Bank of Montreal is 1.22 times more volatile than Senvest Capital. It trades about 0.01 of its total potential returns per unit of risk. Senvest Capital is currently generating about 0.21 per unit of volatility. If you would invest 32,500 in Senvest Capital on August 28, 2024 and sell it today you would earn a total of 500.00 from holding Senvest Capital or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Montreal vs. Senvest Capital
Performance |
| Timeline |
| Bank of Montreal |
| Senvest Capital |
Bank of Montreal and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Montreal and Senvest Capital
The main advantage of trading using opposite Bank of Montreal and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Montreal position performs unexpectedly, Senvest 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 Senvest Capital will offset losses from the drop in Senvest Capital's long position.| Bank of Montreal vs. Stampede Drilling | Bank of Montreal vs. Algonquin Power Utilities | Bank of Montreal vs. Canadian Utilities Limited | Bank of Montreal vs. Cogeco Communications |
| Senvest Capital vs. Totally Hip Technologies | Senvest Capital vs. Enerev5 Metals | Senvest Capital vs. TGS Esports | Senvest Capital vs. Birchtech Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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