Correlation Between Apogee Enterprises and Quanex Building
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Quanex Building 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 Quanex Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Quanex Building Products, you can compare the effects of market volatilities on Apogee Enterprises and Quanex Building 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 Quanex Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Quanex Building.
Diversification Opportunities for Apogee Enterprises and Quanex Building
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apogee and Quanex is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Quanex Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanex Building Products 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 Quanex Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanex Building Products has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Quanex Building go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Quanex Building
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 1.14 times more return on investment than Quanex Building. However, Apogee Enterprises is 1.14 times more volatile than Quanex Building Products. It trades about 0.23 of its potential returns per unit of risk. Quanex Building Products is currently generating about 0.05 per unit of risk. If you would invest 7,495 in Apogee Enterprises on August 24, 2024 and sell it today you would earn a total of 716.00 from holding Apogee Enterprises or generate 9.55% 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. Quanex Building Products
Performance |
| Timeline |
| Apogee Enterprises |
| Quanex Building Products |
Apogee Enterprises and Quanex Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Quanex Building
The main advantage of trading using opposite Apogee Enterprises and Quanex Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Quanex Building 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 Quanex Building will offset losses from the drop in Quanex Building's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Quanex Building vs. Gibraltar Industries | Quanex Building vs. Carpenter Technology | Quanex Building vs. Griffon | Quanex Building vs. ABIVAX Socit Anonyme |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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