Correlation Between Apogee Enterprises and Digi International
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Digi International 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 Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Digi International, you can compare the effects of market volatilities on Apogee Enterprises and Digi International 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 Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Digi International.
Diversification Opportunities for Apogee Enterprises and Digi International
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apogee and Digi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Digi International go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Digi International
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.79 times more return on investment than Digi International. However, Apogee Enterprises is 1.27 times less risky than Digi International. It trades about 0.07 of its potential returns per unit of risk. Digi International is currently generating about 0.0 per unit of risk. If you would invest 4,525 in Apogee Enterprises on September 3, 2024 and sell it today you would earn a total of 3,896 from holding Apogee Enterprises or generate 86.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Digi International
Performance |
| Timeline |
| Apogee Enterprises |
| Digi International |
Apogee Enterprises and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Digi International
The main advantage of trading using opposite Apogee Enterprises and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Digi International vs. Highway Holdings Limited | Digi International vs. QCR Holdings | Digi International vs. Partner Communications | Digi International vs. Acumen Pharmaceuticals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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