Correlation Between Apogee Enterprises and PETRONAS Gas

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

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

Diversification Opportunities for Apogee Enterprises and PETRONAS Gas

-0.33

Correlation Coefficient

Apogee Enterprises  PETRONAS Gas

Very good diversification

The 3 months correlation between Apogee and PETRONAS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and PETRONAS Gas Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PETRONAS Gas Berhad 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 PETRONAS Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PETRONAS Gas Berhad has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and PETRONAS Gas go up and down completely randomly.

Pair Corralation between Apogee Enterprises and PETRONAS Gas

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the PETRONAS Gas. In addition to that, Apogee Enterprises is 1.35 times more volatile than PETRONAS Gas Berhad. It trades about -0.2 of its total potential returns per unit of risk. PETRONAS Gas Berhad is currently generating about -0.01 per unit of volatility. If you would invest  383.00  in PETRONAS Gas Berhad on December 21, 2024 and sell it today you would lose (14.00) from holding PETRONAS Gas Berhad or give up 3.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Apogee Enterprises  vs.  PETRONAS Gas Berhad

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.

PETRONAS Gas Berhad

Risk-Adjusted Performance

Very Weak

Over the last 90 days PETRONAS Gas Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, PETRONAS Gas is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Apogee Enterprises and PETRONAS Gas

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

The idea behind Apogee Enterprises and PETRONAS Gas Berhad 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.