Correlation Between Apogee Enterprises and Integral

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

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

Diversification Opportunities for Apogee Enterprises and Integral

0.64

Correlation Coefficient

Apogee Enterprises  Integral

Poor diversification

The 3 months correlation between Apogee and Integral is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Integral go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Integral

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.72 times more return on investment than Integral. However, Apogee Enterprises is 1.39 times less risky than Integral. It trades about 0.01 of its potential returns per unit of risk. Integral Ad Science is currently generating about -0.03 per unit of risk. If you would invest  5,595  in Apogee Enterprises on October 22, 2024 and sell it today you would lose (26.00) from holding Apogee Enterprises or give up 0.46% of portfolio value over 90 days.

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

Apogee Enterprises  vs.  Integral Ad Science

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.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apogee Enterprises and Integral

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

The idea behind Apogee Enterprises and Integral Ad Science 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.