Correlation Between BlueLinx Holdings and Core Main
Can any of the company-specific risk be diversified away by investing in both BlueLinx Holdings and Core Main 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 BlueLinx Holdings and Core Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlueLinx Holdings and Core Main, you can compare the effects of market volatilities on BlueLinx Holdings and Core Main 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 BlueLinx Holdings with a short position of Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueLinx Holdings and Core Main.
Diversification Opportunities for BlueLinx Holdings and Core Main
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BlueLinx and Core is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding BlueLinx Holdings and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main and BlueLinx Holdings 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 BlueLinx Holdings are associated (or correlated) with Core Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Main has no effect on the direction of BlueLinx Holdings i.e., BlueLinx Holdings and Core Main go up and down completely randomly.
Pair Corralation between BlueLinx Holdings and Core Main
Considering the 90-day investment horizon BlueLinx Holdings is expected to under-perform the Core Main. In addition to that, BlueLinx Holdings is 1.98 times more volatile than Core Main. It trades about -0.09 of its total potential returns per unit of risk. Core Main is currently generating about -0.06 per unit of volatility. If you would invest 5,522 in Core Main on November 18, 2024 and sell it today you would lose (91.00) from holding Core Main or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueLinx Holdings vs. Core Main
Performance |
| Timeline |
| BlueLinx Holdings |
| Core Main |
BlueLinx Holdings and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueLinx Holdings and Core Main
The main advantage of trading using opposite BlueLinx Holdings and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueLinx Holdings position performs unexpectedly, Core Main 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 Core Main will offset losses from the drop in Core Main's long position.| BlueLinx Holdings vs. DXP Enterprises | BlueLinx Holdings vs. Distribution Solutions Group | BlueLinx Holdings vs. Core Main | BlueLinx Holdings vs. WESCO International |
| Core Main vs. Distribution Solutions Group | Core Main vs. Global Industrial Co | Core Main vs. Applied Industrial Technologies | Core Main vs. BlueLinx Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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