Correlation Between Senvest Capital and Synex International

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

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

Diversification Opportunities for Senvest Capital and Synex International

-0.26

Correlation Coefficient

Senvest Capital  Synex International

Very good diversification

The 3 months correlation between Senvest and Synex is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Senvest Capital and Synex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synex International 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 Synex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synex International has no effect on the direction of Senvest Capital i.e., Senvest Capital and Synex International go up and down completely randomly.

Pair Corralation between Senvest Capital and Synex International

Assuming the 90 days trading horizon Senvest Capital is expected to generate 17.38 times less return on investment than Synex International. But when comparing it to its historical volatility, Senvest Capital is 7.23 times less risky than Synex International. It trades about 0.04 of its potential returns per unit of risk. Synex International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  170.00  in Synex International on December 30, 2024 and sell it today you would earn a total of  61.00  from holding Synex International or generate 35.88% 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.  Synex International

Senvest Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Senvest Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Senvest Capital is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Synex International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Synex International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Synex International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Senvest Capital and Synex International

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

The idea behind Senvest Capital and Synex International 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.