Correlation Between Apogee Enterprises and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Software Acquisition 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 Software Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apogee Enterprises and Software Acquisition Group, you can compare the effects of market volatilities on Apogee Enterprises and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Software Acquisition.
Diversification Opportunities for Apogee Enterprises and Software Acquisition
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Apogee and Software is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Software Acquisition go up and down completely randomly.
Pair Corralation between Apogee Enterprises and Software Acquisition
Given the investment horizon of 90 days Apogee Enterprises is expected to generate 7.21 times less return on investment than Software Acquisition. But when comparing it to its historical volatility, Apogee Enterprises is 10.08 times less risky than Software Acquisition. It trades about 0.13 of its potential returns per unit of risk. Software Acquisition Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.62 in Software Acquisition Group on September 12, 2024 and sell it today you would lose (1.62) from holding Software Acquisition Group or give up 61.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.31% |
| Values | Daily Returns |
Apogee Enterprises vs. Software Acquisition Group
Performance |
| Timeline |
| Apogee Enterprises |
| Software Acquisition |
Apogee Enterprises and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apogee Enterprises and Software Acquisition
The main advantage of trading using opposite Apogee Enterprises and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
| Software Acquisition vs. Luxfer Holdings PLC | Software Acquisition vs. Ecovyst | Software Acquisition vs. Codexis | Software Acquisition vs. Eastman Chemical |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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