Correlation Between Apogee Enterprises and Carlisle Companies

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

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

Diversification Opportunities for Apogee Enterprises and Carlisle Companies

0.31

Correlation Coefficient

Apogee Enterprises  Carlisle Companies

Weak diversification

The 3 months correlation between Apogee and Carlisle is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Carlisle Companies Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlisle Companies 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 Carlisle Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlisle Companies has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Carlisle Companies go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Carlisle Companies

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.45 times more return on investment than Carlisle Companies. However, Apogee Enterprises is 1.45 times more volatile than Carlisle Companies Incorporated. It trades about 0.05 of its potential returns per unit of risk. Carlisle Companies Incorporated is currently generating about 0.0 per unit of risk. If you would invest  5,811  in Apogee Enterprises on September 20, 2024 and sell it today you would earn a total of  1,362  from holding Apogee Enterprises or generate 23.44% return on investment over 90 days.

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

Apogee Enterprises  vs.  Carlisle Companies Incorporate

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.

Carlisle Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlisle Companies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Apogee Enterprises and Carlisle Companies

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

The idea behind Apogee Enterprises and Carlisle Companies Incorporated 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.