Correlation Between Masisa and Enjoy SA

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

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

Diversification Opportunities for Masisa and Enjoy SA

0.08

Correlation Coefficient

Masisa  Enjoy SA

Significant diversification

The 3 months correlation between Masisa and Enjoy is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Masisa and Enjoy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enjoy SA and Masisa 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 Masisa are associated (or correlated) with Enjoy SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enjoy SA has no effect on the direction of Masisa i.e., Masisa and Enjoy SA go up and down completely randomly.

Pair Corralation between Masisa and Enjoy SA

Assuming the 90 days trading horizon Masisa is expected to generate 0.75 times more return on investment than Enjoy SA. However, Masisa is 1.33 times less risky than Enjoy SA. It trades about 0.09 of its potential returns per unit of risk. Enjoy SA is currently generating about -0.21 per unit of risk. If you would invest  1,301  in Masisa on December 31, 2024 and sell it today you would earn a total of  115.00  from holding Masisa or generate 8.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Masisa  vs.  Enjoy SA

Masisa

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Masisa are ranked lower than 7 (%) 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 May 2025.

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 unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Masisa and Enjoy SA

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

The idea behind Masisa and Enjoy 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.