Correlation Between Apogee Enterprises and Armstrong World
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Armstrong World 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 World 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 World Industries, you can compare the effects of market volatilities on Apogee Enterprises and Armstrong World 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 World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Armstrong World.
Diversification Opportunities for Apogee Enterprises and Armstrong World
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apogee and Armstrong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Armstrong World Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong World Indu 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 World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armstrong World Indu has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Armstrong World go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Armstrong World
Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Armstrong World. In addition to that, Apogee Enterprises is 4.13 times more volatile than Armstrong World Industries. It trades about -0.25 of its total potential returns per unit of risk. Armstrong World Industries is currently generating about 0.3 per unit of volatility. If you would invest 14,133 in Armstrong World Industries on November 1, 2024 and sell it today you would earn a total of 1,082 from holding Armstrong World Industries or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Armstrong World Industries
Performance |
| Timeline |
| Apogee Enterprises |
| Armstrong World Indu |
Apogee Enterprises and Armstrong World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Armstrong World
The main advantage of trading using opposite Apogee Enterprises and Armstrong World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Armstrong World 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 World will offset losses from the drop in Armstrong World's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Armstrong World vs. Gibraltar Industries | Armstrong World vs. Carpenter Technology | Armstrong World vs. Myers Industries | Armstrong World vs. Griffon |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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