Correlation Between Hurco Companies and Apogee Enterprises

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

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

Diversification Opportunities for Hurco Companies and Apogee Enterprises

0.84

Correlation Coefficient

Hurco Companies  Apogee Enterprises

Very poor diversification

The 3 months correlation between Hurco and Apogee is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Hurco Companies 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 Hurco Companies 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 Hurco Companies i.e., Hurco Companies and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Hurco Companies and Apogee Enterprises

Given the investment horizon of 90 days Hurco Companies is expected to under-perform the Apogee Enterprises. In addition to that, Hurco Companies is 2.36 times more volatile than Apogee Enterprises. It trades about -0.16 of its total potential returns per unit of risk. Apogee Enterprises is currently generating about -0.26 per unit of volatility. If you would invest  8,203  in Apogee Enterprises on September 16, 2024 and sell it today you would lose (523.00) from holding Apogee Enterprises or give up 6.38% of portfolio value over 90 days.

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

Hurco Companies  vs.  Apogee Enterprises

Hurco Companies

Risk-Adjusted Performance

3 of 100

Insignificant

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

Apogee Enterprises

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 6 (%) 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.

Pair Trading with Hurco Companies and Apogee Enterprises

The main advantage of trading using opposite Hurco Companies and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies 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 Hurco Companies 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.