Correlation Between Coca Cola and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Apogee Enterprises, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Apogee Enterprises.
Diversification Opportunities for Coca Cola and Apogee Enterprises
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Apogee is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Coca Cola and Apogee Enterprises
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 9.66 times less return on investment than Apogee Enterprises. But when comparing it to its historical volatility, The Coca Cola is 2.57 times less risky than Apogee Enterprises. It trades about 0.02 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,548 in Apogee Enterprises on September 12, 2024 and sell it today you would earn a total of 3,452 from holding Apogee Enterprises or generate 75.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Apogee Enterprises
Performance |
| Timeline |
| Coca Cola |
| Apogee Enterprises |
Coca Cola and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Apogee Enterprises
The main advantage of trading using opposite Coca Cola and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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