Correlation Between Enjoy SA and Masisa

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

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

Diversification Opportunities for Enjoy SA and Masisa

-0.04

Correlation Coefficient

Enjoy SA  Masisa

Good diversification

The 3 months correlation between Enjoy and Masisa is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Enjoy SA and Masisa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masisa 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 Masisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masisa has no effect on the direction of Enjoy SA i.e., Enjoy SA and Masisa go up and down completely randomly.

Pair Corralation between Enjoy SA and Masisa

Assuming the 90 days trading horizon Enjoy SA is expected to under-perform the Masisa. In addition to that, Enjoy SA is 1.29 times more volatile than Masisa. It trades about -0.21 of its total potential returns per unit of risk. Masisa is currently generating about 0.07 per unit of volatility. If you would invest  1,335  in Masisa on December 29, 2024 and sell it today you would earn a total of  81.00  from holding Masisa or generate 6.07% return on investment over 90 days.

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

Enjoy SA  vs.  Masisa

Enjoy SA

Risk-Adjusted Performance

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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Masisa

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Masisa are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Masisa may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Enjoy SA and Masisa

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

The idea behind Enjoy SA and Masisa 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.