Correlation Between Apogee Enterprises and EXPEDIA

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

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

Diversification Opportunities for Apogee Enterprises and EXPEDIA

0.29

Correlation Coefficient

Apogee Enterprises  EXPEDIA

Modest diversification

The 3 months correlation between Apogee and EXPEDIA is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and EXPEDIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPEDIA GROUP 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 EXPEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXPEDIA GROUP INC has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and EXPEDIA go up and down completely randomly.

Pair Corralation between Apogee Enterprises and EXPEDIA

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the EXPEDIA. In addition to that, Apogee Enterprises is 4.59 times more volatile than EXPEDIA GROUP INC. It trades about -0.08 of its total potential returns per unit of risk. EXPEDIA GROUP INC is currently generating about -0.11 per unit of volatility. If you would invest  10,014  in EXPEDIA GROUP INC on October 9, 2024 and sell it today you would lose (230.00) from holding EXPEDIA GROUP INC or give up 2.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Apogee Enterprises  vs.  EXPEDIA GROUP 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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

EXPEDIA GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EXPEDIA GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EXPEDIA 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 EXPEDIA

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

The idea behind Apogee Enterprises and EXPEDIA GROUP 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.