Correlation Between Apogee Enterprises and INGEVITY

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

By analyzing existing cross correlation between Apogee Enterprises and INGEVITY P 3875, you can compare the effects of market volatilities on Apogee Enterprises and INGEVITY 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 INGEVITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and INGEVITY.

Diversification Opportunities for Apogee Enterprises and INGEVITY

0.28

Correlation Coefficient

Apogee Enterprises  INGEVITY

Modest diversification

The 3 months correlation between Apogee and INGEVITY is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and INGEVITY P 3875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGEVITY P 3875 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 INGEVITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGEVITY P 3875 has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and INGEVITY go up and down completely randomly.

Pair Corralation between Apogee Enterprises and INGEVITY

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.37 times more return on investment than INGEVITY. However, Apogee Enterprises is 1.37 times more volatile than INGEVITY P 3875. It trades about -0.14 of its potential returns per unit of risk. INGEVITY P 3875 is currently generating about -0.23 per unit of risk. If you would invest  7,957  in Apogee Enterprises on October 6, 2024 and sell it today you would lose (767.00) from holding Apogee Enterprises or give up 9.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.24%
Values	Daily Returns

Apogee Enterprises  vs.  INGEVITY P 3875

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.

INGEVITY P 3875

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGEVITY P 3875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INGEVITY P 3875 investors.

Pair Trading with Apogee Enterprises and INGEVITY

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

The idea behind Apogee Enterprises and INGEVITY P 3875 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 Stocks Directory module to find actively traded stocks across global markets.