Correlation Between Senvest Capital and Economic Investment
Can any of the company-specific risk be diversified away by investing in both Senvest Capital and Economic Investment 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 Senvest Capital and Economic Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senvest Capital and Economic Investment Trust, you can compare the effects of market volatilities on Senvest Capital and Economic Investment 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 Senvest Capital with a short position of Economic Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senvest Capital and Economic Investment.
Diversification Opportunities for Senvest Capital and Economic Investment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Senvest and Economic is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Senvest Capital and Economic Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Economic Investment Trust and Senvest Capital 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 Senvest Capital are associated (or correlated) with Economic Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Economic Investment Trust has no effect on the direction of Senvest Capital i.e., Senvest Capital and Economic Investment go up and down completely randomly.
Pair Corralation between Senvest Capital and Economic Investment
Assuming the 90 days trading horizon Senvest Capital is expected to generate 1.54 times less return on investment than Economic Investment. But when comparing it to its historical volatility, Senvest Capital is 1.44 times less risky than Economic Investment. It trades about 0.05 of its potential returns per unit of risk. Economic Investment Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 18,160 in Economic Investment Trust on November 27, 2024 and sell it today you would earn a total of 174.00 from holding Economic Investment Trust or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senvest Capital vs. Economic Investment Trust
Performance |
| Timeline |
| Senvest Capital |
| Economic Investment Trust |
Senvest Capital and Economic Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senvest Capital and Economic Investment
The main advantage of trading using opposite Senvest Capital and Economic Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senvest Capital position performs unexpectedly, Economic Investment 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 Economic Investment will offset losses from the drop in Economic Investment's long position.| Senvest Capital vs. Ramp Metals | Senvest Capital vs. Definity Financial Corp | Senvest Capital vs. XXIX Metal Corp | Senvest Capital vs. Canadian Imperial Bank |
| Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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