Correlation Between Apogee Enterprises and Acme United
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Acme United 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 Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Acme United, you can compare the effects of market volatilities on Apogee Enterprises and Acme United 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 Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Acme United.
Diversification Opportunities for Apogee Enterprises and Acme United
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apogee and Acme is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United 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 Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Acme United go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Acme United
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.67 times more return on investment than Acme United. However, Apogee Enterprises is 1.49 times less risky than Acme United. It trades about 0.1 of its potential returns per unit of risk. Acme United is currently generating about 0.06 per unit of risk. If you would invest 3,834 in Apogee Enterprises on August 31, 2024 and sell it today you would earn a total of 4,544 from holding Apogee Enterprises or generate 118.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Acme United
Performance |
| Timeline |
| Apogee Enterprises |
| Acme United |
Apogee Enterprises and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Acme United
The main advantage of trading using opposite Apogee Enterprises and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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