Correlation Between Senvest Capital and Titanium Transportation

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

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

Diversification Opportunities for Senvest Capital and Titanium Transportation

0.24

Correlation Coefficient

Senvest Capital  Titanium Transportation

Modest diversification

The 3 months correlation between Senvest and Titanium is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Senvest Capital and Titanium Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titanium Transportation 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 Titanium Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titanium Transportation has no effect on the direction of Senvest Capital i.e., Senvest Capital and Titanium Transportation go up and down completely randomly.

Pair Corralation between Senvest Capital and Titanium Transportation

Assuming the 90 days trading horizon Senvest Capital is expected to generate 1.89 times more return on investment than Titanium Transportation. However, Senvest Capital is 1.89 times more volatile than Titanium Transportation Group. It trades about 0.42 of its potential returns per unit of risk. Titanium Transportation Group is currently generating about -0.28 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Senvest Capital  vs.  Titanium Transportation Group

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 unfluctuating fundamental indicators, Senvest Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Titanium Transportation

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Senvest Capital and Titanium Transportation

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

The idea behind Senvest Capital and Titanium Transportation Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.