Correlation Between Enjoei SA and Locaweb Servios

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

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

Diversification Opportunities for Enjoei SA and Locaweb Servios

0.21

Correlation Coefficient

Enjoei SA  Locaweb Servios

Modest diversification

The 3 months correlation between Enjoei and Locaweb is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Enjoei SA and Locaweb Servios de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locaweb Servios de 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 Locaweb Servios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locaweb Servios de has no effect on the direction of Enjoei SA i.e., Enjoei SA and Locaweb Servios go up and down completely randomly.

Pair Corralation between Enjoei SA and Locaweb Servios

Assuming the 90 days trading horizon Enjoei SA is expected to under-perform the Locaweb Servios. In addition to that, Enjoei SA is 1.28 times more volatile than Locaweb Servios de. It trades about -0.03 of its total potential returns per unit of risk. Locaweb Servios de is currently generating about 0.03 per unit of volatility. If you would invest  371.00  in Locaweb Servios de on April 23, 2025 and sell it today you would earn a total of  10.00  from holding Locaweb Servios de or generate 2.7% return on investment over 90 days.

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

Enjoei SA  vs.  Locaweb Servios de

Enjoei SA

Risk-Adjusted Performance

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 comparatively stable basic indicators, Enjoei SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Locaweb Servios de

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Locaweb Servios de are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Locaweb Servios is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enjoei SA and Locaweb Servios

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

The idea behind Enjoei SA and Locaweb Servios de 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.