Correlation Between INGEVITY and Apogee Enterprises

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

By analyzing existing cross correlation between INGEVITY P 3875 and Apogee Enterprises, you can compare the effects of market volatilities on INGEVITY 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 INGEVITY with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of INGEVITY and Apogee Enterprises.

Diversification Opportunities for INGEVITY and Apogee Enterprises

0.27

Correlation Coefficient

INGEVITY  Apogee Enterprises

Modest diversification

The 3 months correlation between INGEVITY and Apogee is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding INGEVITY P 3875 and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and INGEVITY 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 INGEVITY P 3875 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 INGEVITY i.e., INGEVITY and Apogee Enterprises go up and down completely randomly.

Pair Corralation between INGEVITY and Apogee Enterprises

Assuming the 90 days trading horizon INGEVITY is expected to generate 14.54 times less return on investment than Apogee Enterprises. But when comparing it to its historical volatility, INGEVITY P 3875 is 3.35 times less risky than Apogee Enterprises. It trades about 0.02 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,457  in Apogee Enterprises on October 6, 2024 and sell it today you would earn a total of  2,733  from holding Apogee Enterprises or generate 61.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.61%
Values	Daily Returns

INGEVITY P 3875  vs.  Apogee Enterprises

INGEVITY P 3875

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGEVITY P 3875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INGEVITY P 3875 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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with INGEVITY and Apogee Enterprises

The main advantage of trading using opposite INGEVITY and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INGEVITY 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 INGEVITY P 3875 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.