Correlation Between Enjoy SA and Salfacorp

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

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

Diversification Opportunities for Enjoy SA and Salfacorp

-0.61

Correlation Coefficient

Enjoy SA  Salfacorp

Excellent diversification

The 3 months correlation between Enjoy and Salfacorp is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Enjoy SA and Salfacorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salfacorp 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 Salfacorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salfacorp has no effect on the direction of Enjoy SA i.e., Enjoy SA and Salfacorp go up and down completely randomly.

Pair Corralation between Enjoy SA and Salfacorp

Assuming the 90 days trading horizon Enjoy SA is expected to under-perform the Salfacorp. In addition to that, Enjoy SA is 2.04 times more volatile than Salfacorp. It trades about -0.15 of its total potential returns per unit of risk. Salfacorp is currently generating about 0.22 per unit of volatility. If you would invest  55,800  in Salfacorp on December 2, 2024 and sell it today you would earn a total of  8,200  from holding Salfacorp or generate 14.7% 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.  Salfacorp

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.

Salfacorp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salfacorp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Salfacorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enjoy SA and Salfacorp

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

The idea behind Enjoy SA and Salfacorp 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.