Correlation Between Enjoei SA and Neogrid Participaes

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

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

Diversification Opportunities for Enjoei SA and Neogrid Participaes

-0.12

Correlation Coefficient

Enjoei SA  Neogrid Participaes

Good diversification

The 3 months correlation between Enjoei and Neogrid is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Enjoei SA and Neogrid Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogrid Participaes and Enjoei 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 Enjoei SA are associated (or correlated) with Neogrid Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogrid Participaes has no effect on the direction of Enjoei SA i.e., Enjoei SA and Neogrid Participaes go up and down completely randomly.

Pair Corralation between Enjoei SA and Neogrid Participaes

Assuming the 90 days trading horizon Enjoei SA is expected to generate 1.15 times more return on investment than Neogrid Participaes. However, Enjoei SA is 1.15 times more volatile than Neogrid Participaes SA. It trades about 0.09 of its potential returns per unit of risk. Neogrid Participaes SA is currently generating about -0.05 per unit of risk. If you would invest  112.00  in Enjoei SA on November 28, 2024 and sell it today you would earn a total of  23.00  from holding Enjoei SA or generate 20.54% return on investment over 90 days.

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

Enjoei SA  vs.  Neogrid Participaes SA

Enjoei SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enjoei SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enjoei SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Neogrid Participaes

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Enjoei SA and Neogrid Participaes

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

The idea behind Enjoei SA and Neogrid Participaes SA 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.