Correlation Between Enjoei SA and Padtec Holding

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

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

Diversification Opportunities for Enjoei SA and Padtec Holding

0.55

Correlation Coefficient

Enjoei SA  Padtec Holding

Very weak diversification

The 3 months correlation between Enjoei and Padtec is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Enjoei SA and Padtec Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Padtec Holding SA 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 Padtec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Padtec Holding SA has no effect on the direction of Enjoei SA i.e., Enjoei SA and Padtec Holding go up and down completely randomly.

Pair Corralation between Enjoei SA and Padtec Holding

Assuming the 90 days trading horizon Enjoei SA is expected to generate 1.31 times more return on investment than Padtec Holding. However, Enjoei SA is 1.31 times more volatile than Padtec Holding SA. It trades about 0.02 of its potential returns per unit of risk. Padtec Holding SA is currently generating about 0.03 per unit of risk. If you would invest  107.00  in Enjoei SA on December 24, 2024 and sell it today you would earn a total of  1.00  from holding Enjoei SA or generate 0.93% return on investment over 90 days.

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

Enjoei SA  vs.  Padtec Holding SA

Enjoei SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enjoei SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enjoei SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Padtec Holding SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Padtec Holding SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Padtec Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enjoei SA and Padtec Holding

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

The idea behind Enjoei SA and Padtec Holding 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.