Correlation Between Apogee Enterprises and MOSAIC

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

By analyzing existing cross correlation between Apogee Enterprises and MOSAIC NEW 5625, you can compare the effects of market volatilities on Apogee Enterprises and MOSAIC 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 MOSAIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and MOSAIC.

Diversification Opportunities for Apogee Enterprises and MOSAIC

-0.19

Correlation Coefficient

Apogee Enterprises  MOSAIC

Good diversification

The 3 months correlation between Apogee and MOSAIC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and MOSAIC NEW 5625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOSAIC NEW 5625 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 MOSAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOSAIC NEW 5625 has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and MOSAIC go up and down completely randomly.

Pair Corralation between Apogee Enterprises and MOSAIC

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 2.35 times more return on investment than MOSAIC. However, Apogee Enterprises is 2.35 times more volatile than MOSAIC NEW 5625. It trades about 0.1 of its potential returns per unit of risk. MOSAIC NEW 5625 is currently generating about -0.13 per unit of risk. If you would invest  6,523  in Apogee Enterprises on September 13, 2024 and sell it today you would earn a total of  1,331  from holding Apogee Enterprises or generate 20.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.13%
Values	Daily Returns

Apogee Enterprises  vs.  MOSAIC NEW 5625

Apogee Enterprises

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises reported solid returns over the last few months and may actually be approaching a breakup point.

MOSAIC NEW 5625

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MOSAIC NEW 5625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 MOSAIC NEW 5625 investors.

Pair Trading with Apogee Enterprises and MOSAIC

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

The idea behind Apogee Enterprises and MOSAIC NEW 5625 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.