Correlation Between Apogee Enterprises and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Procter Gamble 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 Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Procter Gamble, you can compare the effects of market volatilities on Apogee Enterprises and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Procter Gamble.
Diversification Opportunities for Apogee Enterprises and Procter Gamble
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apogee and Procter is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Procter Gamble go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Procter Gamble
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 3.53 times more return on investment than Procter Gamble. However, Apogee Enterprises is 3.53 times more volatile than Procter Gamble. It trades about 0.14 of its potential returns per unit of risk. Procter Gamble is currently generating about 0.09 per unit of risk. If you would invest 6,522 in Apogee Enterprises on August 28, 2024 and sell it today you would earn a total of 1,965 from holding Apogee Enterprises or generate 30.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apogee Enterprises vs. Procter Gamble
Performance |
| Timeline |
| Apogee Enterprises |
| Procter Gamble |
Apogee Enterprises and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Procter Gamble
The main advantage of trading using opposite Apogee Enterprises and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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