Correlation Between CONSOLIDATED and Apogee Enterprises

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

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

Diversification Opportunities for CONSOLIDATED and Apogee Enterprises

0.26

Correlation Coefficient

CONSOLIDATED  Apogee Enterprises

Modest diversification

The 3 months correlation between CONSOLIDATED and Apogee is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CONSOLIDATED EDISON N and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and CONSOLIDATED 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 CONSOLIDATED EDISON N 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 CONSOLIDATED i.e., CONSOLIDATED and Apogee Enterprises go up and down completely randomly.

Pair Corralation between CONSOLIDATED and Apogee Enterprises

Assuming the 90 days trading horizon CONSOLIDATED EDISON N is expected to under-perform the Apogee Enterprises. But the bond apears to be less risky and, when comparing its historical volatility, CONSOLIDATED EDISON N is 3.63 times less risky than Apogee Enterprises. The bond trades about -0.23 of its potential returns per unit of risk. The Apogee Enterprises is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  6,666  in Apogee Enterprises on September 15, 2024 and sell it today you would earn a total of  1,014  from holding Apogee Enterprises or generate 15.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	54.69%
Values	Daily Returns

CONSOLIDATED EDISON N  vs.  Apogee Enterprises

CONSOLIDATED EDISON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSOLIDATED EDISON N has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for CONSOLIDATED EDISON N investors.

Apogee Enterprises

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CONSOLIDATED and Apogee Enterprises

The main advantage of trading using opposite CONSOLIDATED and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONSOLIDATED 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 CONSOLIDATED EDISON N 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.