Correlation Between Caravelle International and Apogee Enterprises

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

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

Diversification Opportunities for Caravelle International and Apogee Enterprises

-0.55

Correlation Coefficient

Caravelle International  Apogee Enterprises

Excellent diversification

The 3 months correlation between Caravelle and Apogee is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Caravelle International 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 Caravelle International Group 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 Caravelle International i.e., Caravelle International and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Caravelle International and Apogee Enterprises

Given the investment horizon of 90 days Caravelle International Group is expected to generate 4.38 times more return on investment than Apogee Enterprises. However, Caravelle International is 4.38 times more volatile than Apogee Enterprises. It trades about 0.27 of its potential returns per unit of risk. Apogee Enterprises is currently generating about -0.21 per unit of risk. If you would invest  53.00  in Caravelle International Group on October 15, 2024 and sell it today you would earn a total of  251.00  from holding Caravelle International Group or generate 473.58% return on investment over 90 days.

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

Caravelle International Group  vs.  Apogee Enterprises

Caravelle International

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Caravelle International and Apogee Enterprises

The main advantage of trading using opposite Caravelle International and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caravelle International 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 Caravelle International Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.