Correlation Between Apogee Enterprises and Caesarstone

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

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

Diversification Opportunities for Apogee Enterprises and Caesarstone

0.58

Correlation Coefficient

Apogee Enterprises  Caesarstone

Very weak diversification

The 3 months correlation between Apogee and Caesarstone is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Caesarstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caesarstone 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 Caesarstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caesarstone has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Caesarstone go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Caesarstone

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.04 times more return on investment than Caesarstone. However, Apogee Enterprises is 1.04 times more volatile than Caesarstone. It trades about -0.19 of its potential returns per unit of risk. Caesarstone is currently generating about -0.29 per unit of risk. If you would invest  7,092  in Apogee Enterprises on December 30, 2024 and sell it today you would lose (2,425) from holding Apogee Enterprises or give up 34.19% of portfolio value over 90 days.

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

Apogee Enterprises  vs.  Caesarstone

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.

Caesarstone

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caesarstone has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Apogee Enterprises and Caesarstone

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

The idea behind Apogee Enterprises and Caesarstone 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.