Correlation Between Apogee Enterprises and Norfolk Southern
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Norfolk Southern 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 Norfolk Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Norfolk Southern, you can compare the effects of market volatilities on Apogee Enterprises and Norfolk Southern 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 Norfolk Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Norfolk Southern.
Diversification Opportunities for Apogee Enterprises and Norfolk Southern
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apogee and Norfolk is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Norfolk Southern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norfolk Southern 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 Norfolk Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norfolk Southern has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Norfolk Southern go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Norfolk Southern
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 0.77 times more return on investment than Norfolk Southern. However, Apogee Enterprises is 1.29 times less risky than Norfolk Southern. It trades about 0.27 of its potential returns per unit of risk. Norfolk Southern is currently generating about 0.2 per unit of risk. If you would invest 7,580 in Apogee Enterprises on September 2, 2024 and sell it today you would earn a total of 841.00 from holding Apogee Enterprises or generate 11.09% 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. Norfolk Southern
Performance |
| Timeline |
| Apogee Enterprises |
| Norfolk Southern |
Apogee Enterprises and Norfolk Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Norfolk Southern
The main advantage of trading using opposite Apogee Enterprises and Norfolk Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Norfolk Southern 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 Norfolk Southern will offset losses from the drop in Norfolk Southern's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Norfolk Southern vs. Union Pacific | Norfolk Southern vs. Westinghouse Air Brake | Norfolk Southern vs. Trinity Industries | Norfolk Southern vs. Greenbrier Companies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |