Correlation Between Tree Island and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Tree Island 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 Tree Island and Senvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tree Island Steel and Senvest Capital, you can compare the effects of market volatilities on Tree Island 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 Tree Island with a short position of Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tree Island and Senvest Capital.
Diversification Opportunities for Tree Island and Senvest Capital
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tree and Senvest is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tree Island Steel and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Tree Island 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 Tree Island Steel 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 Tree Island i.e., Tree Island and Senvest Capital go up and down completely randomly.
Pair Corralation between Tree Island and Senvest Capital
Assuming the 90 days trading horizon Tree Island Steel is expected to under-perform the Senvest Capital. In addition to that, Tree Island is 1.53 times more volatile than Senvest Capital. It trades about -0.04 of its total potential returns per unit of risk. Senvest Capital is currently generating about 0.26 per unit of volatility. If you would invest 33,600 in Senvest Capital on October 28, 2024 and sell it today you would earn a total of 5,400 from holding Senvest Capital or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tree Island Steel vs. Senvest Capital
Performance |
| Timeline |
| Tree Island Steel |
| Senvest Capital |
Tree Island and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tree Island and Senvest Capital
The main advantage of trading using opposite Tree Island and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tree Island 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.| Tree Island vs. NV Gold Corp | Tree Island vs. Prosper Gold Corp | Tree Island vs. Kesselrun Resources | Tree Island vs. iShares Canadian HYBrid |
| Senvest Capital vs. Millennium Silver Corp | Senvest Capital vs. Verizon Communications CDR | Senvest Capital vs. Andlauer Healthcare Gr | Senvest Capital vs. Nicola Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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