Correlation Between Senvest Capital and Queens Road

Can any of the company-specific risk be diversified away by investing in both Senvest Capital and Queens Road 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 Queens Road into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Senvest Capital and Queens Road Capital, you can compare the effects of market volatilities on Senvest Capital and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senvest Capital and Queens Road.

Diversification Opportunities for Senvest Capital and Queens Road

-0.57

Correlation Coefficient

Senvest Capital  Queens Road

Excellent diversification

The 3 months correlation between Senvest and Queens is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Senvest Capital and Queens Road Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Capital 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 Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Capital has no effect on the direction of Senvest Capital i.e., Senvest Capital and Queens Road go up and down completely randomly.

Pair Corralation between Senvest Capital and Queens Road

Assuming the 90 days trading horizon Senvest Capital is expected to generate 1.06 times more return on investment than Queens Road. However, Senvest Capital is 1.06 times more volatile than Queens Road Capital. It trades about 0.42 of its potential returns per unit of risk. Queens Road Capital is currently generating about -0.03 per unit of risk. If you would invest  34,400  in Senvest Capital on October 8, 2024 and sell it today you would earn a total of  5,100  from holding Senvest Capital or generate 14.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Senvest Capital  vs.  Queens Road Capital

Senvest Capital

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Senvest Capital are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Senvest Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Queens Road Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Queens Road Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Queens Road is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Senvest Capital and Queens Road

The main advantage of trading using opposite Senvest Capital and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senvest Capital position performs unexpectedly, Queens Road 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 Queens Road will offset losses from the drop in Queens Road's long position.

The idea behind Senvest Capital and Queens Road Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..