Correlation Between Apogee Enterprises and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Jacobs Solutions 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 Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Jacobs Solutions, you can compare the effects of market volatilities on Apogee Enterprises and Jacobs Solutions 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 Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Jacobs Solutions.
Diversification Opportunities for Apogee Enterprises and Jacobs Solutions
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apogee and Jacobs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions 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 Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Jacobs Solutions go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Jacobs Solutions
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.82 times more return on investment than Jacobs Solutions. However, Apogee Enterprises is 1.82 times more volatile than Jacobs Solutions. It trades about 0.09 of its potential returns per unit of risk. Jacobs Solutions is currently generating about 0.09 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 Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Jacobs Solutions
Performance |
| Timeline |
| Apogee Enterprises |
| Jacobs Solutions |
Apogee Enterprises and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Jacobs Solutions
The main advantage of trading using opposite Apogee Enterprises and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.| Apogee Enterprises vs. Trex Company | Apogee Enterprises vs. Armstrong World Industries | Apogee Enterprises vs. Gibraltar Industries | Apogee Enterprises vs. Travis Perkins PLC |
| Jacobs Solutions vs. Dycom Industries | Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Wang Lee Group, |
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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