Correlation Between Canadian General and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Canadian General 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 Canadian General and Senvest Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Senvest Capital, you can compare the effects of market volatilities on Canadian General 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 Canadian General with a short position of Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Senvest Capital.
Diversification Opportunities for Canadian General and Senvest Capital
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and Senvest is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Canadian General 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 Canadian General Investments 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 Canadian General i.e., Canadian General and Senvest Capital go up and down completely randomly.
Pair Corralation between Canadian General and Senvest Capital
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 1.73 times more return on investment than Senvest Capital. However, Canadian General is 1.73 times more volatile than Senvest Capital. It trades about 0.11 of its potential returns per unit of risk. Senvest Capital is currently generating about 0.15 per unit of risk. If you would invest 3,884 in Canadian General Investments on September 15, 2024 and sell it today you would earn a total of 251.00 from holding Canadian General Investments or generate 6.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian General Investments vs. Senvest Capital
Performance |
Timeline |
Canadian General Inv |
Senvest Capital |
Canadian General and Senvest Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian General and Senvest Capital
The main advantage of trading using opposite Canadian General and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General 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.Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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