Correlation Between BlueLinx Holdings and Fastenal
Can any of the company-specific risk be diversified away by investing in both BlueLinx Holdings and Fastenal 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 Fastenal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlueLinx Holdings and Fastenal Company, you can compare the effects of market volatilities on BlueLinx Holdings and Fastenal 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 Fastenal. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueLinx Holdings and Fastenal.
Diversification Opportunities for BlueLinx Holdings and Fastenal
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BlueLinx and Fastenal is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding BlueLinx Holdings and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of BlueLinx Holdings i.e., BlueLinx Holdings and Fastenal go up and down completely randomly.
Pair Corralation between BlueLinx Holdings and Fastenal
Considering the 90-day investment horizon BlueLinx Holdings is expected to under-perform the Fastenal. In addition to that, BlueLinx Holdings is 2.34 times more volatile than Fastenal Company. It trades about -0.09 of its total potential returns per unit of risk. Fastenal Company is currently generating about -0.05 per unit of volatility. If you would invest 7,564 in Fastenal Company on November 18, 2024 and sell it today you would lose (86.00) from holding Fastenal Company or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueLinx Holdings vs. Fastenal Company
Performance |
| Timeline |
| BlueLinx Holdings |
| Fastenal |
BlueLinx Holdings and Fastenal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueLinx Holdings and Fastenal
The main advantage of trading using opposite BlueLinx Holdings and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueLinx Holdings position performs unexpectedly, Fastenal 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 Fastenal will offset losses from the drop in Fastenal's long position.| BlueLinx Holdings vs. DXP Enterprises | BlueLinx Holdings vs. Distribution Solutions Group | BlueLinx Holdings vs. Core Main | BlueLinx Holdings vs. WESCO International |
| Fastenal vs. Applied Industrial Technologies | Fastenal vs. MSC Industrial Direct | Fastenal vs. Ferguson Plc | Fastenal vs. Watsco Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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