Correlation Between Apogee Enterprises and Masco
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Masco 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 Masco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Masco, you can compare the effects of market volatilities on Apogee Enterprises and Masco 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 Masco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Masco.
Diversification Opportunities for Apogee Enterprises and Masco
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apogee and Masco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Masco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masco 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 Masco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masco has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Masco go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Masco
Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Masco. In addition to that, Apogee Enterprises is 1.0 times more volatile than Masco. It trades about -0.37 of its total potential returns per unit of risk. Masco is currently generating about -0.17 per unit of volatility. If you would invest 8,007 in Masco on November 29, 2024 and sell it today you would lose (404.00) from holding Masco or give up 5.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Apogee Enterprises vs. Masco
Performance |
Timeline |
Apogee Enterprises |
Masco |
Apogee Enterprises and Masco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apogee Enterprises and Masco
The main advantage of trading using opposite Apogee Enterprises and Masco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Masco 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 Masco will offset losses from the drop in Masco's long position.Apogee Enterprises vs. Quanex Building Products | ||
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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