Correlation Between Eastern and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Eastern 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 Eastern and Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and Apogee Enterprises, you can compare the effects of market volatilities on Eastern 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 Eastern with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Apogee Enterprises.
Diversification Opportunities for Eastern and Apogee Enterprises
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastern and Apogee is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Eastern 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 Eastern Co 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 Eastern i.e., Eastern and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Eastern and Apogee Enterprises
Considering the 90-day investment horizon Eastern Co is expected to under-perform the Apogee Enterprises. In addition to that, Eastern is 1.4 times more volatile than Apogee Enterprises. It trades about -0.1 of its total potential returns per unit of risk. Apogee Enterprises is currently generating about 0.27 per unit of volatility. If you would invest 7,580 in Apogee Enterprises on September 2, 2024 and sell it today you would earn a total of 841.00 from holding Apogee Enterprises or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Co vs. Apogee Enterprises
Performance |
| Timeline |
| Eastern |
| Apogee Enterprises |
Eastern and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and Apogee Enterprises
The main advantage of trading using opposite Eastern and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern 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.The idea behind Eastern Co and Apogee Enterprises pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |