Correlation Between Enbridge and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Enbridge 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 Enbridge and Senvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge and Senvest Capital, you can compare the effects of market volatilities on Enbridge 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 Enbridge with a short position of Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge and Senvest Capital.
Diversification Opportunities for Enbridge and Senvest Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enbridge and Senvest is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Enbridge 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 Enbridge 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 Enbridge i.e., Enbridge and Senvest Capital go up and down completely randomly.
Pair Corralation between Enbridge and Senvest Capital
Assuming the 90 days trading horizon Enbridge is expected to generate 0.65 times more return on investment than Senvest Capital. However, Enbridge is 1.54 times less risky than Senvest Capital. It trades about 0.13 of its potential returns per unit of risk. Senvest Capital is currently generating about 0.04 per unit of risk. If you would invest 4,262 in Enbridge on October 16, 2024 and sell it today you would earn a total of 2,062 from holding Enbridge or generate 48.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enbridge vs. Senvest Capital
Performance |
| Timeline |
| Enbridge |
| Senvest Capital |
Enbridge and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge and Senvest Capital
The main advantage of trading using opposite Enbridge and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge 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.| Enbridge vs. Suncor Energy | Enbridge vs. Toronto Dominion Bank | Enbridge vs. Bank of Nova | Enbridge vs. BCE Inc |
| Senvest Capital vs. Gfl Environmental Holdings | Senvest Capital vs. DIRTT Environmental Solutions | Senvest Capital vs. Canadian Utilities Limited | Senvest Capital vs. T2 Metals 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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