Correlation Between Enjoei SA and Amazon

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

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

Diversification Opportunities for Enjoei SA and Amazon

-0.68

Correlation Coefficient

Enjoei SA  Amazon

Excellent diversification

The 3 months correlation between Enjoei and Amazon is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Enjoei SA and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Enjoei SA i.e., Enjoei SA and Amazon go up and down completely randomly.

Pair Corralation between Enjoei SA and Amazon

Assuming the 90 days trading horizon Enjoei SA is expected to generate 3.47 times less return on investment than Amazon. In addition to that, Enjoei SA is 4.42 times more volatile than Amazon Inc. It trades about 0.03 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.49 per unit of volatility. If you would invest  5,848  in Amazon Inc on September 24, 2024 and sell it today you would earn a total of  1,022  from holding Amazon Inc or generate 17.48% return on investment over 90 days.

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

Enjoei SA  vs.  Amazon Inc

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 weak 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.

Amazon Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amazon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enjoei SA and Amazon

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

The idea behind Enjoei SA and Amazon Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.