Correlation Between Apogee Enterprises and Verde Clean

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

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

Diversification Opportunities for Apogee Enterprises and Verde Clean

0.35

Correlation Coefficient

Apogee Enterprises  Verde Clean

Weak diversification

The 3 months correlation between Apogee and Verde is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Verde Clean Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verde Clean Fuels 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 Verde Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verde Clean Fuels has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Verde Clean go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Verde Clean

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Verde Clean. In addition to that, Apogee Enterprises is 1.12 times more volatile than Verde Clean Fuels. It trades about -0.19 of its total potential returns per unit of risk. Verde Clean Fuels is currently generating about -0.06 per unit of volatility. If you would invest  404.00  in Verde Clean Fuels on December 28, 2024 and sell it today you would lose (51.00) from holding Verde Clean Fuels or give up 12.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Apogee Enterprises  vs.  Verde Clean Fuels

Apogee Enterprises

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Verde Clean Fuels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verde Clean Fuels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Apogee Enterprises and Verde Clean

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

The idea behind Apogee Enterprises and Verde Clean Fuels 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.