Correlation Between Eros Resources and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Eros Resources 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 Eros Resources and Senvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eros Resources Corp and Senvest Capital, you can compare the effects of market volatilities on Eros Resources 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 Eros Resources with a short position of Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Resources and Senvest Capital.
Diversification Opportunities for Eros Resources and Senvest Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eros and Senvest is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eros Resources Corp and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Eros Resources 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 Eros Resources Corp 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 Eros Resources i.e., Eros Resources and Senvest Capital go up and down completely randomly.
Pair Corralation between Eros Resources and Senvest Capital
Assuming the 90 days horizon Eros Resources Corp is expected to under-perform the Senvest Capital. In addition to that, Eros Resources is 7.75 times more volatile than Senvest Capital. It trades about -0.12 of its total potential returns per unit of risk. Senvest Capital is currently generating about 0.05 per unit of volatility. If you would invest 38,950 in Senvest Capital on November 29, 2024 and sell it today you would earn a total of 300.00 from holding Senvest Capital or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eros Resources Corp vs. Senvest Capital
Performance |
| Timeline |
| Eros Resources Corp |
| Senvest Capital |
Eros Resources and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros Resources and Senvest Capital
The main advantage of trading using opposite Eros Resources and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Resources 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.| Eros Resources vs. Canlan Ice Sports | Eros Resources vs. Canadian General Investments | Eros Resources vs. Slate Grocery REIT | Eros Resources vs. Canaf Investments |
| Senvest Capital vs. Computer Modelling Group | Senvest Capital vs. Andean Precious Metals | Senvest Capital vs. XXIX Metal Corp | Senvest Capital vs. Westshore Terminals Investment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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