Correlation Between Enjoy SA and Administradora Americana

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

By analyzing existing cross correlation between Enjoy SA and Administradora Americana de, you can compare the effects of market volatilities on Enjoy SA and Administradora Americana 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 Enjoy SA with a short position of Administradora Americana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enjoy SA and Administradora Americana.

Diversification Opportunities for Enjoy SA and Administradora Americana

-0.71

Correlation Coefficient

Enjoy SA  Administradora Americana

Pay attention - limited upside

The 3 months correlation between Enjoy and Administradora is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Enjoy SA and Administradora Americana de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Administradora Americana and Enjoy SA 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 Enjoy SA are associated (or correlated) with Administradora Americana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Administradora Americana has no effect on the direction of Enjoy SA i.e., Enjoy SA and Administradora Americana go up and down completely randomly.

Pair Corralation between Enjoy SA and Administradora Americana

Assuming the 90 days trading horizon Enjoy SA is expected to under-perform the Administradora Americana. In addition to that, Enjoy SA is 2.65 times more volatile than Administradora Americana de. It trades about -0.22 of its total potential returns per unit of risk. Administradora Americana de is currently generating about 0.25 per unit of volatility. If you would invest  16,396  in Administradora Americana de on September 13, 2024 and sell it today you would earn a total of  3,632  from holding Administradora Americana de or generate 22.15% return on investment over 90 days.

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

Enjoy SA  vs.  Administradora Americana de

Enjoy SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enjoy SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Administradora Americana

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Administradora Americana de are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Administradora Americana unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enjoy SA and Administradora Americana

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

The idea behind Enjoy SA and Administradora Americana de 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.