Correlation Between Apogee Enterprises and Abpro Holdings

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

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

Diversification Opportunities for Apogee Enterprises and Abpro Holdings

-0.25

Correlation Coefficient

Apogee Enterprises  Abpro Holdings

Very good diversification

The 3 months correlation between Apogee and Abpro is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Abpro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abpro Holdings and Apogee Enterprises 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 Apogee Enterprises are associated (or correlated) with Abpro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abpro Holdings has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Abpro Holdings go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Abpro Holdings

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Abpro Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Apogee Enterprises is 28.16 times less risky than Abpro Holdings. The stock trades about -0.56 of its potential returns per unit of risk. The Abpro Holdings is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  4.40  in Abpro Holdings on October 4, 2024 and sell it today you would earn a total of  3.90  from holding Abpro Holdings or generate 88.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.82%
Values	Daily Returns

Apogee Enterprises  vs.  Abpro Holdings

Apogee Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apogee Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Abpro Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Abpro Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Abpro Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apogee Enterprises and Abpro Holdings

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

The idea behind Apogee Enterprises and Abpro Holdings 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.