Correlation Between Enjoei SA and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Enjoei SA and Alibaba Group 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 Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enjoei SA and Alibaba Group Holding, you can compare the effects of market volatilities on Enjoei SA and Alibaba Group 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 Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enjoei SA and Alibaba Group.
Diversification Opportunities for Enjoei SA and Alibaba Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enjoei and Alibaba is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Enjoei SA and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding 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 Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Enjoei SA i.e., Enjoei SA and Alibaba Group go up and down completely randomly.
Pair Corralation between Enjoei SA and Alibaba Group
Assuming the 90 days trading horizon Enjoei SA is expected to generate 1.31 times more return on investment than Alibaba Group. However, Enjoei SA is 1.31 times more volatile than Alibaba Group Holding. It trades about -0.05 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about -0.25 per unit of risk. If you would invest 124.00 in Enjoei SA on August 23, 2024 and sell it today you would lose (5.00) from holding Enjoei SA or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enjoei SA vs. Alibaba Group Holding
Performance |
| Timeline |
| Enjoei SA |
| Alibaba Group Holding |
Enjoei SA and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enjoei SA and Alibaba Group
The main advantage of trading using opposite Enjoei SA and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enjoei SA position performs unexpectedly, Alibaba Group 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.| Enjoei SA vs. Alibaba Group Holding | Enjoei SA vs. Amazon Inc | Enjoei SA vs. BTG Pactual Logstica | Enjoei SA vs. Companhia Paranaense de |
| Alibaba Group vs. Amazon Inc | Alibaba Group vs. Enjoei SA | Alibaba Group vs. BTG Pactual Logstica | Alibaba Group vs. Companhia Paranaense de |
Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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