Correlation Between BlueLinx Holdings and Transcat
Can any of the company-specific risk be diversified away by investing in both BlueLinx Holdings and Transcat 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 Transcat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlueLinx Holdings and Transcat, you can compare the effects of market volatilities on BlueLinx Holdings and Transcat 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 Transcat. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueLinx Holdings and Transcat.
Diversification Opportunities for BlueLinx Holdings and Transcat
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BlueLinx and Transcat is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BlueLinx Holdings and Transcat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcat 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 Transcat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcat has no effect on the direction of BlueLinx Holdings i.e., BlueLinx Holdings and Transcat go up and down completely randomly.
Pair Corralation between BlueLinx Holdings and Transcat
Considering the 90-day investment horizon BlueLinx Holdings is expected to generate 1.08 times more return on investment than Transcat. However, BlueLinx Holdings is 1.08 times more volatile than Transcat. It trades about 0.28 of its potential returns per unit of risk. Transcat is currently generating about 0.1 per unit of risk. If you would invest 10,343 in BlueLinx Holdings on August 30, 2024 and sell it today you would earn a total of 2,170 from holding BlueLinx Holdings or generate 20.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueLinx Holdings vs. Transcat
Performance |
| Timeline |
| BlueLinx Holdings |
| Transcat |
BlueLinx Holdings and Transcat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueLinx Holdings and Transcat
The main advantage of trading using opposite BlueLinx Holdings and Transcat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueLinx Holdings position performs unexpectedly, Transcat 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 Transcat will offset losses from the drop in Transcat's long position.| BlueLinx Holdings vs. DXP Enterprises | BlueLinx Holdings vs. Watsco Inc | BlueLinx Holdings vs. Distribution Solutions Group | BlueLinx Holdings vs. SiteOne Landscape Supply |
| Transcat vs. BlueLinx Holdings | Transcat vs. SiteOne Landscape Supply | Transcat vs. DXP Enterprises | Transcat vs. Core Main |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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