Correlation Between Apogee Enterprises and Coty
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Coty 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 Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Coty Inc, you can compare the effects of market volatilities on Apogee Enterprises and Coty 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 Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Coty.
Diversification Opportunities for Apogee Enterprises and Coty
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apogee and Coty is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc 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 Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Coty go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Coty
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.19 times more return on investment than Coty. However, Apogee Enterprises is 1.19 times more volatile than Coty Inc. It trades about 0.09 of its potential returns per unit of risk. Coty Inc is currently generating about -0.1 per unit of risk. If you would invest 5,257 in Apogee Enterprises on August 25, 2024 and sell it today you would earn a total of 3,065 from holding Apogee Enterprises or generate 58.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Coty Inc
Performance |
| Timeline |
| Apogee Enterprises |
| Coty Inc |
Apogee Enterprises and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Coty
The main advantage of trading using opposite Apogee Enterprises and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Apogee Enterprises vs. Trex Company | Apogee Enterprises vs. Armstrong World Industries | Apogee Enterprises vs. Gibraltar Industries | Apogee Enterprises vs. Travis Perkins PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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