Correlation Between Apogee Enterprises and Vita Coco

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

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

Diversification Opportunities for Apogee Enterprises and Vita Coco

0.05

Correlation Coefficient

Apogee Enterprises  Vita Coco

Significant diversification

The 3 months correlation between Apogee and Vita is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Vita Coco go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Vita Coco

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Vita Coco. In addition to that, Apogee Enterprises is 1.07 times more volatile than Vita Coco. It trades about -0.19 of its total potential returns per unit of risk. Vita Coco is currently generating about -0.06 per unit of volatility. If you would invest  3,634  in Vita Coco on December 26, 2024 and sell it today you would lose (462.00) from holding Vita Coco or give up 12.71% of portfolio value over 90 days.

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

Apogee Enterprises  vs.  Vita Coco

Apogee Enterprises

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vita Coco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vita Coco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Apogee Enterprises and Vita Coco

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

The idea behind Apogee Enterprises and Vita Coco 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.