Correlation Between NYSE Declining and Apogee Enterprises

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

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

Diversification Opportunities for NYSE Declining and Apogee Enterprises

-0.01

Correlation Coefficient

NYSE Declining  Apogee Enterprises

Good diversification

The 3 months correlation between NYSE and Apogee is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Declining Volume and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and NYSE Declining 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 NYSE Declining Volume 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 NYSE Declining i.e., NYSE Declining and Apogee Enterprises go up and down completely randomly.

Pair Corralation between NYSE Declining and Apogee Enterprises

Assuming the 90 days trading horizon NYSE Declining Volume is expected to generate 51.12 times more return on investment than Apogee Enterprises. However, NYSE Declining is 51.12 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 0.06 per unit of risk. If you would invest  111,549  in NYSE Declining Volume on October 4, 2024 and sell it today you would lose (11,686) from holding NYSE Declining Volume or give up 10.48% of portfolio value over 90 days.

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

NYSE Declining Volume  vs.  Apogee Enterprises

Pair Trading with NYSE Declining and Apogee Enterprises

The main advantage of trading using opposite NYSE Declining and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Declining 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 NYSE Declining Volume 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.