Correlation Between Apogee Enterprises and Mars Acquisition

Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Mars 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 Mars 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 Mars Acquisition Corp, you can compare the effects of market volatilities on Apogee Enterprises and Mars 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Mars Acquisition.

Diversification Opportunities for Apogee Enterprises and Mars Acquisition

0.59

Correlation Coefficient

Apogee Enterprises  Mars Acquisition

Very weak diversification

The 3 months correlation between Apogee and Mars is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Mars Acquisition go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Mars Acquisition

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.21 times more return on investment than Mars Acquisition. However, Apogee Enterprises is 4.66 times less risky than Mars Acquisition. It trades about -0.36 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about -0.17 per unit of risk. If you would invest  8,078  in Apogee Enterprises on October 10, 2024 and sell it today you would lose (2,318) from holding Apogee Enterprises or give up 28.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Apogee Enterprises  vs.  Mars Acquisition Corp

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.

Mars Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mars Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Apogee Enterprises and Mars Acquisition

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

The idea behind Apogee Enterprises and Mars Acquisition Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.