Correlation Between Apogee Enterprises and JD Sports
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and JD Sports 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 JD Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and JD Sports Fashion, you can compare the effects of market volatilities on Apogee Enterprises and JD Sports 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 JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and JD Sports.
Diversification Opportunities for Apogee Enterprises and JD Sports
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apogee and JDDSF is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion 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 JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and JD Sports go up and down completely randomly.
Pair Corralation between Apogee Enterprises and JD Sports
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.84 times more return on investment than JD Sports. However, Apogee Enterprises is 1.19 times less risky than JD Sports. It trades about 0.12 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.0 per unit of risk. If you would invest 4,388 in Apogee Enterprises on August 24, 2024 and sell it today you would earn a total of 3,888 from holding Apogee Enterprises or generate 88.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Apogee Enterprises vs. JD Sports Fashion
Performance |
| Timeline |
| Apogee Enterprises |
| JD Sports Fashion |
Apogee Enterprises and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and JD Sports
The main advantage of trading using opposite Apogee Enterprises and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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