Correlation Between Apogee Enterprises and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and The Coca Cola, you can compare the effects of market volatilities on Apogee Enterprises and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Coca Cola.
Diversification Opportunities for Apogee Enterprises and Coca Cola
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apogee and Coca is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Coca Cola go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Coca Cola
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 2.57 times more return on investment than Coca Cola. However, Apogee Enterprises is 2.57 times more volatile than The Coca Cola. It trades about 0.09 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.02 per unit of risk. If you would invest 4,548 in Apogee Enterprises on September 12, 2024 and sell it today you would earn a total of 3,452 from holding Apogee Enterprises or generate 75.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. The Coca Cola
Performance |
| Timeline |
| Apogee Enterprises |
| Coca Cola |
Apogee Enterprises and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Coca Cola
The main advantage of trading using opposite Apogee Enterprises and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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