Correlation Between Apogee Enterprises and 629377CH3

Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and 629377CH3 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 629377CH3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apogee Enterprises and NRG Energy 525, you can compare the effects of market volatilities on Apogee Enterprises and 629377CH3 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 629377CH3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and 629377CH3.

Diversification Opportunities for Apogee Enterprises and 629377CH3

0.42

Correlation Coefficient

Apogee Enterprises  629377CH3

Very weak diversification

The 3 months correlation between Apogee and 629377CH3 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and NRG Energy 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy 525 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 629377CH3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy 525 has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and 629377CH3 go up and down completely randomly.

Pair Corralation between Apogee Enterprises and 629377CH3

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 3.23 times more return on investment than 629377CH3. However, Apogee Enterprises is 3.23 times more volatile than NRG Energy 525. It trades about 0.05 of its potential returns per unit of risk. NRG Energy 525 is currently generating about 0.02 per unit of risk. If you would invest  4,460  in Apogee Enterprises on October 4, 2024 and sell it today you would earn a total of  2,604  from holding Apogee Enterprises or generate 58.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.76%
Values	Daily Returns

Apogee Enterprises  vs.  NRG Energy 525

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.

NRG Energy 525

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NRG Energy 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 629377CH3 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apogee Enterprises and 629377CH3

The main advantage of trading using opposite Apogee Enterprises and 629377CH3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, 629377CH3 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 629377CH3 will offset losses from the drop in 629377CH3's long position.

The idea behind Apogee Enterprises and NRG Energy 525 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.