Correlation Between Apogee Enterprises and Humatech

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

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

Diversification Opportunities for Apogee Enterprises and Humatech

0.37

Correlation Coefficient

Apogee Enterprises  Humatech

Weak diversification

The 3 months correlation between Apogee and Humatech is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Humatech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humatech 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 Humatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humatech has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Humatech go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Humatech

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 31.19 times less return on investment than Humatech. But when comparing it to its historical volatility, Apogee Enterprises is 37.03 times less risky than Humatech. It trades about 0.15 of its potential returns per unit of risk. Humatech is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Humatech on September 4, 2024 and sell it today you would earn a total of  0.17  from holding Humatech or generate 1700.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Apogee Enterprises  vs.  Humatech

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.

Humatech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Humatech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Humatech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apogee Enterprises and Humatech

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

The idea behind Apogee Enterprises and Humatech 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.