Correlation Between Gatekeeper Systems and Senvest Capital

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

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

Diversification Opportunities for Gatekeeper Systems and Senvest Capital

0.42

Correlation Coefficient

Gatekeeper Systems  Senvest Capital

Very weak diversification

The 3 months correlation between Gatekeeper and Senvest is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gatekeeper Systems and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital and Gatekeeper Systems 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 Gatekeeper Systems 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 Gatekeeper Systems i.e., Gatekeeper Systems and Senvest Capital go up and down completely randomly.

Pair Corralation between Gatekeeper Systems and Senvest Capital

Assuming the 90 days horizon Gatekeeper Systems is expected to under-perform the Senvest Capital. In addition to that, Gatekeeper Systems is 5.58 times more volatile than Senvest Capital. It trades about -0.01 of its total potential returns per unit of risk. Senvest Capital is currently generating about 0.37 per unit of volatility. If you would invest  32,500  in Senvest Capital on October 1, 2024 and sell it today you would earn a total of  3,500  from holding Senvest Capital or generate 10.77% return on investment over 90 days.

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

Gatekeeper Systems  vs.  Senvest Capital

Gatekeeper Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gatekeeper Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gatekeeper Systems is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Senvest Capital

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Senvest Capital are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Senvest Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gatekeeper Systems and Senvest Capital

The main advantage of trading using opposite Gatekeeper Systems and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatekeeper Systems 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 Gatekeeper Systems 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.