Correlation Between Comfort Systems and Apogee Enterprises

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

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

Diversification Opportunities for Comfort Systems and Apogee Enterprises

0.47

Correlation Coefficient

Comfort Systems  Apogee Enterprises

Very weak diversification

The 3 months correlation between Comfort and Apogee is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Comfort Systems USA and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises and Comfort Systems 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 Comfort Systems USA 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 Comfort Systems i.e., Comfort Systems and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Comfort Systems and Apogee Enterprises

Considering the 90-day investment horizon Comfort Systems USA is expected to generate 1.54 times more return on investment than Apogee Enterprises. However, Comfort Systems is 1.54 times more volatile than Apogee Enterprises. It trades about 0.25 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.04 per unit of risk. If you would invest  42,855  in Comfort Systems USA on May 6, 2025 and sell it today you would earn a total of  26,675  from holding Comfort Systems USA or generate 62.24% return on investment over 90 days.

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

Comfort Systems USA  vs.  Apogee Enterprises

Comfort Systems USA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Comfort Systems USA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, Comfort Systems showed solid returns over the last few months and may actually be approaching a breakup point.

Apogee Enterprises

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Apogee Enterprises is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Comfort Systems and Apogee Enterprises

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

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.