Correlation Between Janus International and Apogee Enterprises

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

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

Diversification Opportunities for Janus International and Apogee Enterprises

-0.69

Correlation Coefficient

Janus International  Apogee Enterprises

Excellent diversification

The 3 months correlation between Janus and Apogee is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Janus International 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 Janus International Group 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 Janus International i.e., Janus International and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Janus International and Apogee Enterprises

Considering the 90-day investment horizon Janus International Group is expected to under-perform the Apogee Enterprises. In addition to that, Janus International is 1.27 times more volatile than Apogee Enterprises. It trades about -0.12 of its total potential returns per unit of risk. Apogee Enterprises is currently generating about 0.12 per unit of volatility. If you would invest  6,657  in Apogee Enterprises on August 30, 2024 and sell it today you would earn a total of  1,721  from holding Apogee Enterprises or generate 25.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Janus International Group  vs.  Apogee Enterprises

Janus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Apogee Enterprises

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 9 (%) 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 Janus International and Apogee Enterprises

The main advantage of trading using opposite Janus International and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus International 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 Janus International Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.