Correlation Between Integral and Apogee Enterprises

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

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

Diversification Opportunities for Integral and Apogee Enterprises

0.64

Correlation Coefficient

Integral  Apogee Enterprises

Poor diversification

The 3 months correlation between Integral and Apogee is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Integral and Apogee Enterprises

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the Apogee Enterprises. In addition to that, Integral is 1.39 times more volatile than Apogee Enterprises. It trades about -0.03 of its total potential returns per unit of risk. Apogee Enterprises is currently generating about 0.01 per unit of volatility. If you would invest  5,595  in Apogee Enterprises on October 22, 2024 and sell it today you would lose (26.00) from holding Apogee Enterprises or give up 0.46% of portfolio value over 90 days.

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

Integral Ad Science  vs.  Apogee Enterprises

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 Integral and Apogee Enterprises

The main advantage of trading using opposite Integral and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.