Correlation Between Apogee Enterprises and Armstrong Flooring
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Armstrong Flooring 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 Armstrong Flooring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Armstrong Flooring, you can compare the effects of market volatilities on Apogee Enterprises and Armstrong Flooring 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 Armstrong Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Armstrong Flooring.
Diversification Opportunities for Apogee Enterprises and Armstrong Flooring
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apogee and Armstrong is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Armstrong Flooring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong Flooring 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 Armstrong Flooring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armstrong Flooring has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Armstrong Flooring go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Armstrong Flooring
If you would invest 1.00 in Armstrong Flooring on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Armstrong Flooring or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Apogee Enterprises vs. Armstrong Flooring
Performance |
| Timeline |
| Apogee Enterprises |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Apogee Enterprises and Armstrong Flooring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Armstrong Flooring
The main advantage of trading using opposite Apogee Enterprises and Armstrong Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Armstrong Flooring 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 Armstrong Flooring will offset losses from the drop in Armstrong Flooring's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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