Correlation Between Apogee Enterprises and Compagnie

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

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

Diversification Opportunities for Apogee Enterprises and Compagnie

0.24

Correlation Coefficient

Apogee Enterprises  Compagnie

Modest diversification

The 3 months correlation between Apogee and Compagnie is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint and Apogee Enterprises 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 Apogee Enterprises are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Compagnie go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Compagnie

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 2.32 times more return on investment than Compagnie. However, Apogee Enterprises is 2.32 times more volatile than Compagnie de Saint Gobain. It trades about 0.04 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about -0.03 per unit of risk. If you would invest  6,722  in Apogee Enterprises on September 22, 2024 and sell it today you would earn a total of  406.00  from holding Apogee Enterprises or generate 6.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Apogee Enterprises  vs.  Compagnie de Saint Gobain

Apogee Enterprises

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Apogee Enterprises may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Compagnie de Saint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compagnie de Saint Gobain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Compagnie is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apogee Enterprises and Compagnie

The main advantage of trading using opposite Apogee Enterprises and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.

The idea behind Apogee Enterprises and Compagnie de Saint Gobain 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 Commodity Directory module to find actively traded commodities issued by global exchanges.