Correlation Between Carlisle Companies and Apogee Enterprises

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

By analyzing existing cross correlation between Carlisle Companies Incorporated and Apogee Enterprises, you can compare the effects of market volatilities on Carlisle Companies and Apogee Enterprises 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 Carlisle Companies with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlisle Companies and Apogee Enterprises.

Diversification Opportunities for Carlisle Companies and Apogee Enterprises

0.31

Correlation Coefficient

Carlisle Companies  Apogee Enterprises

Weak diversification

The 3 months correlation between Carlisle and Apogee is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Carlisle Companies Incorporate and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Carlisle Companies 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 Carlisle Companies Incorporated are associated (or correlated) with Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Carlisle Companies i.e., Carlisle Companies and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Carlisle Companies and Apogee Enterprises

Considering the 90-day investment horizon Carlisle Companies is expected to generate 20.64 times less return on investment than Apogee Enterprises. But when comparing it to its historical volatility, Carlisle Companies Incorporated is 1.45 times less risky than Apogee Enterprises. It trades about 0.0 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5,811  in Apogee Enterprises on September 20, 2024 and sell it today you would earn a total of  1,362  from holding Apogee Enterprises or generate 23.44% return on investment over 90 days.

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

Carlisle Companies Incorporate  vs.  Apogee Enterprises

Carlisle Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlisle Companies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Apogee Enterprises

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Carlisle Companies and Apogee Enterprises

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

The idea behind Carlisle Companies Incorporated and Apogee Enterprises 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.