Correlation Between Apogee Enterprises and Weyco

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

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

Diversification Opportunities for Apogee Enterprises and Weyco

0.37

Correlation Coefficient

Apogee Enterprises  Weyco

Weak diversification

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

Pair Corralation between Apogee Enterprises and Weyco

Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.41 times less return on investment than Weyco. In addition to that, Apogee Enterprises is 1.0 times more volatile than Weyco Group. It trades about 0.06 of its total potential returns per unit of risk. Weyco Group is currently generating about 0.08 per unit of volatility. If you would invest  2,890  in Weyco Group on September 29, 2024 and sell it today you would earn a total of  832.00  from holding Weyco Group or generate 28.79% 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.  Weyco Group

Apogee Enterprises

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 2 (%) 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.

Weyco Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apogee Enterprises and Weyco

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

The idea behind Apogee Enterprises and Weyco Group 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.