Correlation Between Guardian Capital and Senvest Capital

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

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

Diversification Opportunities for Guardian Capital and Senvest Capital

0.68

Correlation Coefficient

Guardian Capital  Senvest Capital

Poor diversification

The 3 months correlation between Guardian and Senvest is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Guardian 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 Guardian Capital Group 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 Guardian Capital i.e., Guardian Capital and Senvest Capital go up and down completely randomly.

Pair Corralation between Guardian Capital and Senvest Capital

Assuming the 90 days trading horizon Guardian Capital is expected to generate 45.43 times less return on investment than Senvest Capital. In addition to that, Guardian Capital is 2.69 times more volatile than Senvest Capital. It trades about 0.0 of its total potential returns per unit of risk. Senvest Capital is currently generating about 0.2 per unit of volatility. If you would invest  32,800  in Senvest Capital on September 20, 2024 and sell it today you would earn a total of  2,200  from holding Senvest Capital or generate 6.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Guardian Capital Group  vs.  Senvest Capital

Guardian Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardian Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Guardian Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Senvest Capital

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Senvest Capital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Senvest Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guardian Capital and Senvest Capital

The main advantage of trading using opposite Guardian Capital and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Capital 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.

The idea behind Guardian Capital Group and Senvest 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 Global Correlations module to find global opportunities by holding instruments from different markets.