Correlation Between NESNVX and Apogee Enterprises

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

By analyzing existing cross correlation between NESNVX 625 15 JAN 26 and Apogee Enterprises, you can compare the effects of market volatilities on NESNVX 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 NESNVX with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Apogee Enterprises.

Diversification Opportunities for NESNVX and Apogee Enterprises

0.28

Correlation Coefficient

NESNVX  Apogee Enterprises

Modest diversification

The 3 months correlation between NESNVX and Apogee is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 625 15 JAN 26 and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and NESNVX 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 NESNVX 625 15 JAN 26 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 NESNVX i.e., NESNVX and Apogee Enterprises go up and down completely randomly.

Pair Corralation between NESNVX and Apogee Enterprises

Assuming the 90 days trading horizon NESNVX is expected to generate 5.19 times less return on investment than Apogee Enterprises. But when comparing it to its historical volatility, NESNVX 625 15 JAN 26 is 2.87 times less risky than Apogee Enterprises. It trades about 0.03 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,719  in Apogee Enterprises on October 8, 2024 and sell it today you would earn a total of  1,471  from holding Apogee Enterprises or generate 25.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	36.9%
Values	Daily Returns

NESNVX 625 15 JAN 26  vs.  Apogee Enterprises

NESNVX 625 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 625 15 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 nearly stable basic indicators, Apogee Enterprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NESNVX and Apogee Enterprises

The main advantage of trading using opposite NESNVX and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESNVX 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 NESNVX 625 15 JAN 26 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..