Correlation Between Apogee Enterprises and Cencora

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

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

Diversification Opportunities for Apogee Enterprises and Cencora

0.76

Correlation Coefficient

Apogee Enterprises  Cencora

Poor diversification

The 3 months correlation between Apogee and Cencora is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora 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 Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Cencora go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Cencora

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Cencora. In addition to that, Apogee Enterprises is 1.38 times more volatile than Cencora. It trades about -0.08 of its total potential returns per unit of risk. Cencora is currently generating about 0.07 per unit of volatility. If you would invest  21,900  in Cencora on October 7, 2024 and sell it today you would earn a total of  1,020  from holding Cencora or generate 4.66% return on investment over 90 days.

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

Apogee Enterprises  vs.  Cencora

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 latest weak 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.

Cencora

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cencora are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Cencora 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 Cencora

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

The idea behind Apogee Enterprises and Cencora 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.