Correlation Between Royal Bank and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Royal Bank 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 Royal Bank and Senvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Bank of and Senvest Capital, you can compare the effects of market volatilities on Royal Bank 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 Royal Bank with a short position of Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Bank and Senvest Capital.
Diversification Opportunities for Royal Bank and Senvest Capital
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Royal and Senvest is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Royal Bank of and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Royal Bank 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 Royal Bank of 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 Royal Bank i.e., Royal Bank and Senvest Capital go up and down completely randomly.
Pair Corralation between Royal Bank and Senvest Capital
Assuming the 90 days horizon Royal Bank of is expected to generate 1.5 times more return on investment than Senvest Capital. However, Royal Bank is 1.5 times more volatile than Senvest Capital. It trades about 0.2 of its potential returns per unit of risk. Senvest Capital is currently generating about -0.09 per unit of risk. If you would invest 15,867 in Royal Bank of on August 28, 2024 and sell it today you would earn a total of 1,599 from holding Royal Bank of or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Bank of vs. Senvest Capital
Performance |
| Timeline |
| Royal Bank |
| Senvest Capital |
Royal Bank and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Bank and Senvest Capital
The main advantage of trading using opposite Royal Bank and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Bank 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.| Royal Bank vs. DelphX Capital Markets | Royal Bank vs. Citadel Income | Royal Bank vs. iShares Canadian HYBrid | Royal Bank vs. Altagas Cum Red |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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