Correlation Between Flexible Solutions and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions 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 Flexible Solutions and Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Apogee Enterprises, you can compare the effects of market volatilities on Flexible Solutions 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 Flexible Solutions with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Apogee Enterprises.
Diversification Opportunities for Flexible Solutions and Apogee Enterprises
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexible and Apogee is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Flexible Solutions 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 Flexible Solutions International 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 Flexible Solutions i.e., Flexible Solutions and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Flexible Solutions and Apogee Enterprises
Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the Apogee Enterprises. In addition to that, Flexible Solutions is 2.45 times more volatile than Apogee Enterprises. It trades about -0.01 of its total potential returns per unit of risk. Apogee Enterprises is currently generating about 0.21 per unit of volatility. If you would invest 7,669 in Apogee Enterprises on August 27, 2024 and sell it today you would earn a total of 653.00 from holding Apogee Enterprises or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Apogee Enterprises
Performance |
| Timeline |
| Flexible Solutions |
| Apogee Enterprises |
Flexible Solutions and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Apogee Enterprises
The main advantage of trading using opposite Flexible Solutions and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.| Flexible Solutions vs. Minerals Technologies | Flexible Solutions vs. Oil Dri | Flexible Solutions vs. H B Fuller | Flexible Solutions vs. Northern Technologies |
| Apogee Enterprises vs. Trex Company | Apogee Enterprises vs. Gibraltar Industries | Apogee Enterprises vs. Travis Perkins PLC | Apogee Enterprises vs. Janus International Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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