Correlation Between Vipshop Holdings and Enjoei SA

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

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

Diversification Opportunities for Vipshop Holdings and Enjoei SA

-0.29

Correlation Coefficient

Vipshop Holdings  Enjoei SA

Very good diversification

The 3 months correlation between Vipshop and Enjoei is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Enjoei SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enjoei SA and Vipshop Holdings 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 Vipshop Holdings Limited 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 Vipshop Holdings i.e., Vipshop Holdings and Enjoei SA go up and down completely randomly.

Pair Corralation between Vipshop Holdings and Enjoei SA

Assuming the 90 days trading horizon Vipshop Holdings Limited is expected to generate 0.78 times more return on investment than Enjoei SA. However, Vipshop Holdings Limited is 1.28 times less risky than Enjoei SA. It trades about 0.1 of its potential returns per unit of risk. Enjoei SA is currently generating about -0.06 per unit of risk. If you would invest  3,600  in Vipshop Holdings Limited on September 13, 2024 and sell it today you would earn a total of  616.00  from holding Vipshop Holdings Limited or generate 17.11% return on investment over 90 days.

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

Vipshop Holdings Limited  vs.  Enjoei SA

Vipshop Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vipshop Holdings Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Vipshop Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

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 weak 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.

Pair Trading with Vipshop Holdings and Enjoei SA

The main advantage of trading using opposite Vipshop Holdings and Enjoei SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop Holdings 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 Vipshop Holdings Limited 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 CEOs Directory module to screen CEOs from public companies around the world.