Correlation Between Definitive Healthcare and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Definitive Healthcare and Apogee Enterprises 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 Definitive Healthcare and Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Definitive Healthcare Corp and Apogee Enterprises, you can compare the effects of market volatilities on Definitive Healthcare and Apogee Enterprises 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 Definitive Healthcare with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and Apogee Enterprises.
Diversification Opportunities for Definitive Healthcare and Apogee Enterprises
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Definitive and Apogee is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Definitive Healthcare 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 Definitive Healthcare Corp are associated (or correlated) with Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Definitive Healthcare and Apogee Enterprises
Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to generate 2.13 times more return on investment than Apogee Enterprises. However, Definitive Healthcare is 2.13 times more volatile than Apogee Enterprises. It trades about 0.13 of its potential returns per unit of risk. Apogee Enterprises is currently generating about -0.31 per unit of risk. If you would invest 440.00 in Definitive Healthcare Corp on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Definitive Healthcare Corp or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Definitive Healthcare Corp vs. Apogee Enterprises
Performance |
| Timeline |
| Definitive Healthcare |
| Apogee Enterprises |
Definitive Healthcare and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Definitive Healthcare and Apogee Enterprises
The main advantage of trading using opposite Definitive Healthcare and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definitive Healthcare position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.| Definitive Healthcare vs. National Research Corp | Definitive Healthcare vs. Evolent Health | Definitive Healthcare vs. Simulations Plus | Definitive Healthcare vs. Privia Health Group |
| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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