Correlation Between Apogee Enterprises and Goldenstone Acquisition

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

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

Diversification Opportunities for Apogee Enterprises and Goldenstone Acquisition

-0.25

Correlation Coefficient

Apogee Enterprises  Goldenstone Acquisition

Very good diversification

The 3 months correlation between Apogee and Goldenstone is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Goldenstone Acquisition Limite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldenstone Acquisition 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 Goldenstone Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldenstone Acquisition has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Goldenstone Acquisition go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Goldenstone Acquisition

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Goldenstone Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Apogee Enterprises is 16.73 times less risky than Goldenstone Acquisition. The stock trades about -0.56 of its potential returns per unit of risk. The Goldenstone Acquisition Limited is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2.06  in Goldenstone Acquisition Limited on October 4, 2024 and sell it today you would earn a total of  0.94  from holding Goldenstone Acquisition Limited or generate 45.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	36.36%
Values	Daily Returns

Apogee Enterprises  vs.  Goldenstone Acquisition Limite

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 weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Goldenstone Acquisition

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Goldenstone Acquisition Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Goldenstone Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apogee Enterprises and Goldenstone Acquisition

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

The idea behind Apogee Enterprises and Goldenstone Acquisition Limited 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.