Correlation Between Apogee Enterprises and New Horizon
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and New Horizon 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 New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and New Horizon Aircraft, you can compare the effects of market volatilities on Apogee Enterprises and New Horizon 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 New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and New Horizon.
Diversification Opportunities for Apogee Enterprises and New Horizon
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apogee and New is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and New Horizon Aircraft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Aircraft 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 New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Aircraft has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and New Horizon go up and down completely randomly.
Pair Corralation between Apogee Enterprises and New Horizon
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.22 times more return on investment than New Horizon. However, Apogee Enterprises is 4.45 times less risky than New Horizon. It trades about 0.07 of its potential returns per unit of risk. New Horizon Aircraft is currently generating about -0.03 per unit of risk. If you would invest 4,244 in Apogee Enterprises on September 14, 2024 and sell it today you would earn a total of 3,455 from holding Apogee Enterprises or generate 81.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.46% |
| Values | Daily Returns |
Apogee Enterprises vs. New Horizon Aircraft
Performance |
| Timeline |
| Apogee Enterprises |
| New Horizon Aircraft |
Apogee Enterprises and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and New Horizon
The main advantage of trading using opposite Apogee Enterprises and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon's long position.| Apogee Enterprises vs. Trex Company | Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Armstrong World Industries | Apogee Enterprises vs. Gibraltar Industries |
| New Horizon vs. Consol Energy | New Horizon vs. Reservoir Media | New Horizon vs. Apogee Enterprises | New Horizon vs. Flexible Solutions International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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