Correlation Between Apogee Enterprises and Armstrong World

Can any of the company-specific risk be diversified away by investing in both Apogee Enterprises and Armstrong World 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 Apogee Enterprises and Armstrong World into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apogee Enterprises and Armstrong World Industries, you can compare the effects of market volatilities on Apogee Enterprises and Armstrong World 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 Apogee Enterprises with a short position of Armstrong World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apogee Enterprises and Armstrong World.

Diversification Opportunities for Apogee Enterprises and Armstrong World

-0.32

Correlation Coefficient

Apogee Enterprises  Armstrong World

Very good diversification

The 3 months correlation between Apogee and Armstrong is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apogee Enterprises and Armstrong World Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong World Indu and Apogee Enterprises 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 Apogee Enterprises are associated (or correlated) with Armstrong World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armstrong World Indu has no effect on the direction of Apogee Enterprises i.e., Apogee Enterprises and Armstrong World go up and down completely randomly.

Pair Corralation between Apogee Enterprises and Armstrong World

Given the investment horizon of 90 days Apogee Enterprises is expected to under-perform the Armstrong World. In addition to that, Apogee Enterprises is 1.4 times more volatile than Armstrong World Industries. It trades about -0.11 of its total potential returns per unit of risk. Armstrong World Industries is currently generating about 0.15 per unit of volatility. If you would invest  13,926  in Armstrong World Industries on February 26, 2025 and sell it today you would earn a total of  1,864  from holding Armstrong World Industries or generate 13.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apogee Enterprises  vs.  Armstrong World Industries

Apogee Enterprises

Risk-Adjusted Performance

Very Weak

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 June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Armstrong World Indu

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Armstrong World Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Armstrong World is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Apogee Enterprises and Armstrong World

The main advantage of trading using opposite Apogee Enterprises and Armstrong World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apogee Enterprises position performs unexpectedly, Armstrong World 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 Armstrong World will offset losses from the drop in Armstrong World's long position.

The idea behind Apogee Enterprises and Armstrong World Industries 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.