Correlation Between Armstrong Flooring and BlueLinx Holdings
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring 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 Armstrong Flooring and BlueLinx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and BlueLinx Holdings, you can compare the effects of market volatilities on Armstrong Flooring 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 Armstrong Flooring with a short position of BlueLinx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and BlueLinx Holdings.
Diversification Opportunities for Armstrong Flooring and BlueLinx Holdings
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armstrong and BlueLinx is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and BlueLinx Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueLinx Holdings and Armstrong Flooring 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 Armstrong Flooring 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 Armstrong Flooring i.e., Armstrong Flooring and BlueLinx Holdings go up and down completely randomly.
Pair Corralation between Armstrong Flooring and BlueLinx Holdings
If you would invest 6,931 in BlueLinx Holdings on January 25, 2024 and sell it today you would earn a total of 4,459 from holding BlueLinx Holdings or generate 64.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.81% |
| Values | Daily Returns |
Armstrong Flooring vs. BlueLinx Holdings
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BlueLinx Holdings |
Armstrong Flooring and BlueLinx Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and BlueLinx Holdings
The main advantage of trading using opposite Armstrong Flooring and BlueLinx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring 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.| Armstrong Flooring vs. Townsquare Media | Armstrong Flooring vs. National CineMedia | Armstrong Flooring vs. Tyson Foods | Armstrong Flooring vs. ZhongAn Online P |
| BlueLinx Holdings vs. EVI Industries | 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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