Correlation Between Fortress Biotech and BlueLinx Holdings
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and BlueLinx Holdings 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 Fortress Biotech and BlueLinx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech Pref and BlueLinx Holdings, you can compare the effects of market volatilities on Fortress Biotech and BlueLinx Holdings 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 Fortress Biotech with a short position of BlueLinx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and BlueLinx Holdings.
Diversification Opportunities for Fortress Biotech and BlueLinx Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortress and BlueLinx is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and BlueLinx Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueLinx Holdings and Fortress Biotech 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 Fortress Biotech Pref are associated (or correlated) with BlueLinx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueLinx Holdings has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and BlueLinx Holdings go up and down completely randomly.
Pair Corralation between Fortress Biotech and BlueLinx Holdings
Assuming the 90 days horizon Fortress Biotech Pref is expected to under-perform the BlueLinx Holdings. But the preferred stock apears to be less risky and, when comparing its historical volatility, Fortress Biotech Pref is 1.17 times less risky than BlueLinx Holdings. The preferred stock trades about -0.13 of its potential returns per unit of risk. The BlueLinx Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9,986 in BlueLinx Holdings on November 3, 2024 and sell it today you would earn a total of 792.00 from holding BlueLinx Holdings or generate 7.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fortress Biotech Pref vs. BlueLinx Holdings
Performance |
Timeline |
Fortress Biotech Pref |
BlueLinx Holdings |
Fortress Biotech and BlueLinx Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fortress Biotech and BlueLinx Holdings
The main advantage of trading using opposite Fortress Biotech and BlueLinx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, BlueLinx Holdings 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 BlueLinx Holdings will offset losses from the drop in BlueLinx Holdings' long position.Fortress Biotech vs. Checkpoint Therapeutics | Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Reviva Pharmaceuticals Holdings | Fortress Biotech vs. Kodiak Sciences |
BlueLinx Holdings vs. DXP Enterprises | BlueLinx Holdings vs. Distribution Solutions Group | BlueLinx Holdings vs. Core Main | BlueLinx Holdings vs. WESCO International |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |