Correlation Between Apogee Enterprises and American Healthcare

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

By analyzing existing cross correlation between Apogee Enterprises and American Healthcare REIT,, you can compare the effects of market volatilities on Apogee Enterprises and American Healthcare 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 American Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and American Healthcare.

Diversification Opportunities for Apogee Enterprises and American Healthcare

0.48

Correlation Coefficient

Apogee Enterprises  American Healthcare

Very weak diversification

The 3 months correlation between Apogee and American is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and American Healthcare REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Healthcare REIT, 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 American Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Healthcare REIT, has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and American Healthcare go up and down completely randomly.

Pair Corralation between Apogee Enterprises and American Healthcare

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 3.79 times less return on investment than American Healthcare. In addition to that, Apogee Enterprises is 1.64 times more volatile than American Healthcare REIT,. It trades about 0.04 of its total potential returns per unit of risk. American Healthcare REIT, is currently generating about 0.28 per unit of volatility. If you would invest  1,644  in American Healthcare REIT, on September 21, 2024 and sell it today you would earn a total of  1,143  from holding American Healthcare REIT, or generate 69.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.07%
Values	Daily Returns

Apogee Enterprises  vs.  American Healthcare REIT,

Apogee Enterprises

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises may actually be approaching a critical reversion point that can send shares even higher in January 2025.

American Healthcare REIT,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Healthcare REIT, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, American Healthcare is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Apogee Enterprises and American Healthcare

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

The idea behind Apogee Enterprises and American Healthcare REIT, 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.