Correlation Between Fastenal and BlueLinx Holdings
Can any of the company-specific risk be diversified away by investing in both Fastenal 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 Fastenal and BlueLinx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fastenal Company and BlueLinx Holdings, you can compare the effects of market volatilities on Fastenal 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 Fastenal with a short position of BlueLinx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastenal and BlueLinx Holdings.
Diversification Opportunities for Fastenal and BlueLinx Holdings
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fastenal and BlueLinx is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fastenal Company and BlueLinx Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueLinx Holdings and Fastenal 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 Fastenal Company 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 Fastenal i.e., Fastenal and BlueLinx Holdings go up and down completely randomly.
Pair Corralation between Fastenal and BlueLinx Holdings
Given the investment horizon of 90 days Fastenal Company is expected to generate 0.6 times more return on investment than BlueLinx Holdings. However, Fastenal Company is 1.66 times less risky than BlueLinx Holdings. It trades about 0.1 of its potential returns per unit of risk. BlueLinx Holdings is currently generating about -0.05 per unit of risk. If you would invest 3,759 in Fastenal Company on March 12, 2025 and sell it today you would earn a total of 454.00 from holding Fastenal Company or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fastenal Company vs. BlueLinx Holdings
Performance |
| Timeline |
| Fastenal |
| BlueLinx Holdings |
Fastenal and BlueLinx Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fastenal and BlueLinx Holdings
The main advantage of trading using opposite Fastenal and BlueLinx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastenal 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.| Fastenal vs. Applied Industrial Technologies | Fastenal vs. MSC Industrial Direct | Fastenal vs. Ferguson Plc | Fastenal vs. Watsco Inc |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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