Correlation Between BLUELINX HLDGS and Carrier Global

Can any of the company-specific risk be diversified away by investing in both BLUELINX HLDGS and Carrier Global 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 HLDGS and Carrier Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BLUELINX HLDGS DL 01 and Carrier Global, you can compare the effects of market volatilities on BLUELINX HLDGS and Carrier Global 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 HLDGS with a short position of Carrier Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUELINX HLDGS and Carrier Global.

Diversification Opportunities for BLUELINX HLDGS and Carrier Global

0.0

Correlation Coefficient

BLUELINX HLDGS  Carrier Global

Pay attention - limited upside

The 3 months correlation between BLUELINX and Carrier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BLUELINX HLDGS DL 01 and Carrier Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrier Global and BLUELINX HLDGS 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 HLDGS DL 01 are associated (or correlated) with Carrier Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrier Global has no effect on the direction of BLUELINX HLDGS i.e., BLUELINX HLDGS and Carrier Global go up and down completely randomly.

Pair Corralation between BLUELINX HLDGS and Carrier Global

Assuming the 90 days trading horizon BLUELINX HLDGS DL 01 is expected to under-perform the Carrier Global. In addition to that, BLUELINX HLDGS is 1.04 times more volatile than Carrier Global. It trades about -0.55 of its total potential returns per unit of risk. Carrier Global is currently generating about -0.34 per unit of volatility. If you would invest  7,361  in Carrier Global on October 1, 2024 and sell it today you would lose (743.00) from holding Carrier Global or give up 10.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BLUELINX HLDGS DL 01  vs.  Carrier Global

BLUELINX HLDGS DL

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BLUELINX HLDGS DL 01 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, BLUELINX HLDGS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Carrier Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carrier Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Carrier Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BLUELINX HLDGS and Carrier Global

The main advantage of trading using opposite BLUELINX HLDGS and Carrier Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUELINX HLDGS position performs unexpectedly, Carrier Global 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 Carrier Global will offset losses from the drop in Carrier Global's long position.

The idea behind BLUELINX HLDGS DL 01 and Carrier Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.