Correlation Between Enjoei SA and Pinduoduo

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

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

Diversification Opportunities for Enjoei SA and Pinduoduo

0.6

Correlation Coefficient

Enjoei SA  Pinduoduo

Poor diversification

The 3 months correlation between Enjoei and Pinduoduo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Enjoei SA and Pinduoduo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinduoduo 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 Pinduoduo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinduoduo has no effect on the direction of Enjoei SA i.e., Enjoei SA and Pinduoduo go up and down completely randomly.

Pair Corralation between Enjoei SA and Pinduoduo

Assuming the 90 days trading horizon Enjoei SA is expected to generate 1.86 times more return on investment than Pinduoduo. However, Enjoei SA is 1.86 times more volatile than Pinduoduo. It trades about 0.02 of its potential returns per unit of risk. Pinduoduo is currently generating about 0.04 per unit of risk. If you would invest  116.00  in Enjoei SA on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Enjoei SA or generate 0.0% return on investment over 90 days.

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

Enjoei SA  vs.  Pinduoduo

Enjoei SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enjoei SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Enjoei SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pinduoduo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinduoduo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Enjoei SA and Pinduoduo

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

The idea behind Enjoei SA and Pinduoduo 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.