Correlation Between Apogee Enterprises and Brenmiller Energy

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

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

Diversification Opportunities for Apogee Enterprises and Brenmiller Energy

-0.41

Correlation Coefficient

Apogee Enterprises  Brenmiller Energy

Very good diversification

The 3 months correlation between Apogee and Brenmiller is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy 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 Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Brenmiller Energy

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 2.32 times less return on investment than Brenmiller Energy. But when comparing it to its historical volatility, Apogee Enterprises is 4.69 times less risky than Brenmiller Energy. It trades about 0.07 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Brenmiller Energy Ltd on September 24, 2024 and sell it today you would lose (14.70) from holding Brenmiller Energy Ltd or give up 16.33% of portfolio value over 90 days.

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

Apogee Enterprises  vs.  Brenmiller Energy Ltd

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.

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brenmiller Energy Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Apogee Enterprises and Brenmiller Energy

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

The idea behind Apogee Enterprises and Brenmiller Energy Ltd 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.