Correlation Between Canadian Utilities and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities 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 Canadian Utilities and Senvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Senvest Capital, you can compare the effects of market volatilities on Canadian Utilities 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 Canadian Utilities with a short position of Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Senvest Capital.
Diversification Opportunities for Canadian Utilities and Senvest Capital
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Senvest is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Canadian Utilities 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 Canadian Utilities Limited 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 Canadian Utilities i.e., Canadian Utilities and Senvest Capital go up and down completely randomly.
Pair Corralation between Canadian Utilities and Senvest Capital
Assuming the 90 days horizon Canadian Utilities is expected to generate 2.56 times less return on investment than Senvest Capital. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.24 times less risky than Senvest Capital. It trades about 0.01 of its potential returns per unit of risk. Senvest Capital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 34,000 in Senvest Capital on October 30, 2024 and sell it today you would earn a total of 5,000 from holding Senvest Capital or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Senvest Capital
Performance |
| Timeline |
| Canadian Utilities |
| Senvest Capital |
Canadian Utilities and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Senvest Capital
The main advantage of trading using opposite Canadian Utilities and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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.| Canadian Utilities vs. Fortis Inc | Canadian Utilities vs. Emera Inc | Canadian Utilities vs. Algonquin Power Utilities | Canadian Utilities vs. ATCO |
| Senvest Capital vs. Gfl Environmental Holdings | Senvest Capital vs. Contagious Gaming | Senvest Capital vs. Globex Mining Enterprises | Senvest Capital vs. CVW CleanTech |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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