Correlation Between Apogee Enterprises and DIH Holding

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

By analyzing existing cross correlation between Apogee Enterprises and DIH Holding US,, you can compare the effects of market volatilities on Apogee Enterprises and DIH Holding 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 DIH Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and DIH Holding.

Diversification Opportunities for Apogee Enterprises and DIH Holding

-0.12

Correlation Coefficient

Apogee Enterprises  DIH Holding

Good diversification

The 3 months correlation between Apogee and DIH is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and DIH Holding US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holding US, 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 DIH Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holding US, has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and DIH Holding go up and down completely randomly.

Pair Corralation between Apogee Enterprises and DIH Holding

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 6.41 times less return on investment than DIH Holding. But when comparing it to its historical volatility, Apogee Enterprises is 7.05 times less risky than DIH Holding. It trades about 0.15 of its potential returns per unit of risk. DIH Holding US, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3.00  in DIH Holding US, on September 4, 2024 and sell it today you would earn a total of  1.98  from holding DIH Holding US, or generate 66.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Apogee Enterprises  vs.  DIH Holding US,

Apogee Enterprises

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 11 (%) 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.

DIH Holding US,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DIH Holding US, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, DIH Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apogee Enterprises and DIH Holding

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

The idea behind Apogee Enterprises and DIH Holding US, 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.