Correlation Between Apogee Enterprises and BAKER

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

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

Diversification Opportunities for Apogee Enterprises and BAKER

-0.27

Correlation Coefficient

Apogee Enterprises  BAKER

Very good diversification

The 3 months correlation between Apogee and BAKER is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A 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 BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and BAKER go up and down completely randomly.

Pair Corralation between Apogee Enterprises and BAKER

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the BAKER. In addition to that, Apogee Enterprises is 3.17 times more volatile than BAKER HUGHES A. It trades about -0.36 of its total potential returns per unit of risk. BAKER HUGHES A is currently generating about -0.12 per unit of volatility. If you would invest  8,303  in BAKER HUGHES A on October 10, 2024 and sell it today you would lose (245.00) from holding BAKER HUGHES A or give up 2.95% of portfolio value over 90 days.

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

Apogee Enterprises  vs.  BAKER HUGHES A

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.

BAKER HUGHES A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAKER HUGHES A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BAKER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apogee Enterprises and BAKER

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

The idea behind Apogee Enterprises and BAKER HUGHES A 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.