Correlation Between Apogee Enterprises and 512807AV0

Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and 512807AV0 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 512807AV0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apogee Enterprises and LAM RESEARCH PORATION, you can compare the effects of market volatilities on Apogee Enterprises and 512807AV0 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 512807AV0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and 512807AV0.

Diversification Opportunities for Apogee Enterprises and 512807AV0

0.44

Correlation Coefficient

Apogee Enterprises  512807AV0

Very weak diversification

The 3 months correlation between Apogee and 512807AV0 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and LAM RESEARCH PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAM RESEARCH PORATION 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 512807AV0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAM RESEARCH PORATION has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and 512807AV0 go up and down completely randomly.

Pair Corralation between Apogee Enterprises and 512807AV0

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 59.14 times less return on investment than 512807AV0. But when comparing it to its historical volatility, Apogee Enterprises is 29.22 times less risky than 512807AV0. It trades about 0.03 of its potential returns per unit of risk. LAM RESEARCH PORATION is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,428  in LAM RESEARCH PORATION on October 22, 2024 and sell it today you would earn a total of  331.00  from holding LAM RESEARCH PORATION or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.53%
Values	Daily Returns

Apogee Enterprises  vs.  LAM RESEARCH PORATION

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.

LAM RESEARCH PORATION

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LAM RESEARCH PORATION are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 512807AV0 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apogee Enterprises and 512807AV0

The main advantage of trading using opposite Apogee Enterprises and 512807AV0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, 512807AV0 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 512807AV0 will offset losses from the drop in 512807AV0's long position.

The idea behind Apogee Enterprises and LAM RESEARCH PORATION 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.