Correlation Between Apogee Enterprises and Nasdaq

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

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

Diversification Opportunities for Apogee Enterprises and Nasdaq

0.4

Correlation Coefficient

Apogee Enterprises  Nasdaq

Very weak diversification

The 3 months correlation between Apogee and Nasdaq is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Nasdaq go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Nasdaq

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Nasdaq. In addition to that, Apogee Enterprises is 1.44 times more volatile than Nasdaq Inc. It trades about -0.56 of its total potential returns per unit of risk. Nasdaq Inc is currently generating about -0.2 per unit of volatility. If you would invest  8,075  in Nasdaq Inc on October 4, 2024 and sell it today you would lose (332.00) from holding Nasdaq Inc or give up 4.11% 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.  Nasdaq Inc

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.

Nasdaq Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Apogee Enterprises and Nasdaq

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

The idea behind Apogee Enterprises and Nasdaq Inc 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.