Correlation Between Trane Technologies and Apogee Enterprises

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Can any of the company-specific risk be diversified away by investing in both Trane Technologies 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 Trane Technologies and Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trane Technologies plc and Apogee Enterprises, you can compare the effects of market volatilities on Trane Technologies 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 Trane Technologies with a short position of Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trane Technologies and Apogee Enterprises.

Diversification Opportunities for Trane Technologies and Apogee Enterprises

TraneApogeeDiversified AwayTraneApogeeDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Trane and Apogee is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Trane Technologies plc and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Trane Technologies 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 Trane Technologies plc 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 Trane Technologies i.e., Trane Technologies and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Trane Technologies and Apogee Enterprises

Allowing for the 90-day total investment horizon Trane Technologies plc is expected to generate 0.87 times more return on investment than Apogee Enterprises. However, Trane Technologies plc is 1.16 times less risky than Apogee Enterprises. It trades about -0.16 of its potential returns per unit of risk. Apogee Enterprises is currently generating about -0.37 per unit of risk. If you would invest  36,576  in Trane Technologies plc on November 29, 2024 and sell it today you would lose (1,517) from holding Trane Technologies plc or give up 4.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Trane Technologies plc  vs.  Apogee Enterprises

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-30-20-100
JavaScript chart by amCharts 3.21.15TT APOG
       Timeline  
Trane Technologies plc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Trane Technologies plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb340350360370380390400410420
Apogee Enterprises 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Apogee Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5055606570758085

Trane Technologies and Apogee Enterprises Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.64-2.0-1.37-0.74-0.110.461.041.622.22.78 0.040.060.080.100.120.140.16
JavaScript chart by amCharts 3.21.15TT APOG
       Returns  

Pair Trading with Trane Technologies and Apogee Enterprises

The main advantage of trading using opposite Trane Technologies and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trane Technologies 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 Trane Technologies plc 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.
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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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