Correlation Between Senvest Capital and Taiga Building
Can any of the company-specific risk be diversified away by investing in both Senvest Capital and Taiga Building 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 Taiga Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senvest Capital and Taiga Building Products, you can compare the effects of market volatilities on Senvest Capital and Taiga Building 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 Taiga Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senvest Capital and Taiga Building.
Diversification Opportunities for Senvest Capital and Taiga Building
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Senvest and Taiga is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Senvest Capital and Taiga Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiga Building Products 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 Taiga Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiga Building Products has no effect on the direction of Senvest Capital i.e., Senvest Capital and Taiga Building go up and down completely randomly.
Pair Corralation between Senvest Capital and Taiga Building
Assuming the 90 days trading horizon Senvest Capital is expected to generate 0.39 times more return on investment than Taiga Building. However, Senvest Capital is 2.53 times less risky than Taiga Building. It trades about 0.46 of its potential returns per unit of risk. Taiga Building Products is currently generating about -0.04 per unit of risk. If you would invest 32,500 in Senvest Capital on September 3, 2024 and sell it today you would earn a total of 2,000 from holding Senvest Capital or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senvest Capital vs. Taiga Building Products
Performance |
| Timeline |
| Senvest Capital |
| Taiga Building Products |
Senvest Capital and Taiga Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senvest Capital and Taiga Building
The main advantage of trading using opposite Senvest Capital and Taiga Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senvest Capital position performs unexpectedly, Taiga Building 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 Taiga Building will offset losses from the drop in Taiga Building's long position.| Senvest Capital vs. Rocky Mountain Liquor | Senvest Capital vs. Capstone Mining Corp | Senvest Capital vs. Globex Mining Enterprises | Senvest Capital vs. East Side Games |
| Taiga Building vs. Goodfellow | Taiga Building vs. Conifex Timber | Taiga Building vs. Supremex | Taiga Building vs. Western Forest Products |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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