Correlation Between Apogee Enterprises and PGT Innovations
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and PGT Innovations 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 PGT Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and PGT Innovations, you can compare the effects of market volatilities on Apogee Enterprises and PGT Innovations 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 PGT Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and PGT Innovations.
Diversification Opportunities for Apogee Enterprises and PGT Innovations
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apogee and PGT is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and PGT Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGT Innovations 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 PGT Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGT Innovations has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and PGT Innovations go up and down completely randomly.
Pair Corralation between Apogee Enterprises and PGT Innovations
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 2.0 times less return on investment than PGT Innovations. In addition to that, Apogee Enterprises is 1.01 times more volatile than PGT Innovations. It trades about 0.07 of its total potential returns per unit of risk. PGT Innovations is currently generating about 0.14 per unit of volatility. If you would invest 1,819 in PGT Innovations on August 27, 2024 and sell it today you would earn a total of 976.00 from holding PGT Innovations or generate 53.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.85% |
| Values | Daily Returns |
Apogee Enterprises vs. PGT Innovations
Performance |
| Timeline |
| Apogee Enterprises |
| PGT Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Apogee Enterprises and PGT Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and PGT Innovations
The main advantage of trading using opposite Apogee Enterprises and PGT Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, PGT Innovations 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 PGT Innovations will offset losses from the drop in PGT Innovations' long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| PGT Innovations vs. Quanex Building Products | PGT Innovations vs. Janus International Group | PGT Innovations vs. Interface | PGT Innovations vs. Apogee Enterprises |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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