Correlation Between Apogee Enterprises and Louisiana Pacific
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Louisiana Pacific 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 Louisiana Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Louisiana Pacific, you can compare the effects of market volatilities on Apogee Enterprises and Louisiana Pacific 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 Louisiana Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Louisiana Pacific.
Diversification Opportunities for Apogee Enterprises and Louisiana Pacific
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apogee and Louisiana is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Louisiana Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Louisiana Pacific 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 Louisiana Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Louisiana Pacific has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Louisiana Pacific go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Louisiana Pacific
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.7 times less return on investment than Louisiana Pacific. But when comparing it to its historical volatility, Apogee Enterprises is 1.12 times less risky than Louisiana Pacific. It trades about 0.24 of its potential returns per unit of risk. Louisiana Pacific is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 9,843 in Louisiana Pacific on August 31, 2024 and sell it today you would earn a total of 1,821 from holding Louisiana Pacific or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Louisiana Pacific
Performance |
| Timeline |
| Apogee Enterprises |
| Louisiana Pacific |
Apogee Enterprises and Louisiana Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Louisiana Pacific
The main advantage of trading using opposite Apogee Enterprises and Louisiana Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Louisiana Pacific 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 Louisiana Pacific will offset losses from the drop in Louisiana Pacific's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Louisiana Pacific vs. Lennox International | Louisiana Pacific vs. Fortune Brands Innovations | Louisiana Pacific vs. Trane Technologies plc | Louisiana Pacific vs. Johnson Controls 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |