Correlation Between Grupo SBF and Enjoei SA

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

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

Diversification Opportunities for Grupo SBF and Enjoei SA

0.82

Correlation Coefficient

Grupo SBF  Enjoei SA

Very poor diversification

The 3 months correlation between Grupo and Enjoei is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Grupo SBF SA and Enjoei SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enjoei SA and Grupo SBF 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 Grupo SBF SA are associated (or correlated) with Enjoei SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enjoei SA has no effect on the direction of Grupo SBF i.e., Grupo SBF and Enjoei SA go up and down completely randomly.

Pair Corralation between Grupo SBF and Enjoei SA

Assuming the 90 days trading horizon Grupo SBF SA is expected to under-perform the Enjoei SA. But the stock apears to be less risky and, when comparing its historical volatility, Grupo SBF SA is 1.38 times less risky than Enjoei SA. The stock trades about -0.25 of its potential returns per unit of risk. The Enjoei SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Enjoei SA on September 12, 2024 and sell it today you would lose (20.00) from holding Enjoei SA or give up 14.49% of portfolio value over 90 days.

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

Grupo SBF SA  vs.  Enjoei SA

Grupo SBF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo SBF 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Grupo SBF and Enjoei SA

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

The idea behind Grupo SBF SA and Enjoei 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .