Correlation Between NIBE Industrier and Apogee Enterprises

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

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

Diversification Opportunities for NIBE Industrier and Apogee Enterprises

-0.25

Correlation Coefficient

NIBE Industrier  Apogee Enterprises

Very good diversification

The 3 months correlation between NIBE and Apogee is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NIBE Industrier AB and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and NIBE Industrier 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 NIBE Industrier AB 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 NIBE Industrier i.e., NIBE Industrier and Apogee Enterprises go up and down completely randomly.

Pair Corralation between NIBE Industrier and Apogee Enterprises

Assuming the 90 days horizon NIBE Industrier AB is expected to generate 2.29 times more return on investment than Apogee Enterprises. However, NIBE Industrier is 2.29 times more volatile than Apogee Enterprises. It trades about -0.2 of its potential returns per unit of risk. Apogee Enterprises is currently generating about -0.57 per unit of risk. If you would invest  429.00  in NIBE Industrier AB on September 26, 2024 and sell it today you would lose (56.00) from holding NIBE Industrier AB or give up 13.05% of portfolio value over 90 days.

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

NIBE Industrier AB  vs.  Apogee Enterprises

NIBE Industrier AB

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days NIBE Industrier AB 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 fundamental drivers remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Apogee Enterprises

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 2 (%) 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 NIBE Industrier and Apogee Enterprises

The main advantage of trading using opposite NIBE Industrier and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIBE Industrier 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 NIBE Industrier AB 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.