Correlation Between Apogee Enterprises and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Kaiser Aluminum 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 Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Kaiser Aluminum, you can compare the effects of market volatilities on Apogee Enterprises and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Kaiser Aluminum.
Diversification Opportunities for Apogee Enterprises and Kaiser Aluminum
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apogee and Kaiser is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Kaiser Aluminum
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.83 times more return on investment than Kaiser Aluminum. However, Apogee Enterprises is 1.2 times less risky than Kaiser Aluminum. It trades about 0.1 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about 0.04 per unit of risk. If you would invest 4,102 in Apogee Enterprises on September 2, 2024 and sell it today you would earn a total of 4,319 from holding Apogee Enterprises or generate 105.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Kaiser Aluminum
Performance |
| Timeline |
| Apogee Enterprises |
| Kaiser Aluminum |
Apogee Enterprises and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Kaiser Aluminum
The main advantage of trading using opposite Apogee Enterprises and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
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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