Correlation Between BlueLinx Holdings and Global Industrial
Can any of the company-specific risk be diversified away by investing in both BlueLinx Holdings and Global Industrial 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 Global Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlueLinx Holdings and Global Industrial Co, you can compare the effects of market volatilities on BlueLinx Holdings and Global Industrial 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 Global Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueLinx Holdings and Global Industrial.
Diversification Opportunities for BlueLinx Holdings and Global Industrial
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BlueLinx and Global is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BlueLinx Holdings and Global Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Industrial 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 Global Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Industrial has no effect on the direction of BlueLinx Holdings i.e., BlueLinx Holdings and Global Industrial go up and down completely randomly.
Pair Corralation between BlueLinx Holdings and Global Industrial
Considering the 90-day investment horizon BlueLinx Holdings is expected to generate 0.82 times more return on investment than Global Industrial. However, BlueLinx Holdings is 1.22 times less risky than Global Industrial. It trades about 0.11 of its potential returns per unit of risk. Global Industrial Co is currently generating about -0.07 per unit of risk. If you would invest 10,463 in BlueLinx Holdings on August 23, 2024 and sell it today you would earn a total of 1,873 from holding BlueLinx Holdings or generate 17.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueLinx Holdings vs. Global Industrial Co
Performance |
| Timeline |
| BlueLinx Holdings |
| Global Industrial |
BlueLinx Holdings and Global Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueLinx Holdings and Global Industrial
The main advantage of trading using opposite BlueLinx Holdings and Global Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueLinx Holdings position performs unexpectedly, Global Industrial 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 Global Industrial will offset losses from the drop in Global Industrial's long position.| BlueLinx Holdings vs. DXP Enterprises | BlueLinx Holdings vs. Distribution Solutions Group | BlueLinx Holdings vs. Core Main | BlueLinx Holdings vs. Applied Industrial Technologies |
| Global Industrial vs. Distribution Solutions Group | Global Industrial vs. Core Main | Global Industrial vs. Applied Industrial Technologies | Global Industrial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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