Correlation Between BlueLinx Holdings and EVI Industries

Can any of the company-specific risk be diversified away by investing in both BlueLinx Holdings and EVI Industries 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 EVI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlueLinx Holdings and EVI Industries, you can compare the effects of market volatilities on BlueLinx Holdings and EVI Industries 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 EVI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueLinx Holdings and EVI Industries.

Diversification Opportunities for BlueLinx Holdings and EVI Industries

-0.24

Correlation Coefficient

BlueLinx Holdings  EVI Industries

Very good diversification

The 3 months correlation between BlueLinx and EVI is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding BlueLinx Holdings and EVI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVI Industries 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 EVI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVI Industries has no effect on the direction of BlueLinx Holdings i.e., BlueLinx Holdings and EVI Industries go up and down completely randomly.

Pair Corralation between BlueLinx Holdings and EVI Industries

Considering the 90-day investment horizon BlueLinx Holdings is expected to under-perform the EVI Industries. But the stock apears to be less risky and, when comparing its historical volatility, BlueLinx Holdings is 1.16 times less risky than EVI Industries. The stock trades about -0.13 of its potential returns per unit of risk. The EVI Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,701  in EVI Industries on December 28, 2024 and sell it today you would earn a total of  160.00  from holding EVI Industries or generate 9.41% return on investment over 90 days.

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

BlueLinx Holdings  vs.  EVI Industries

BlueLinx Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlueLinx Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

EVI Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EVI Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, EVI Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BlueLinx Holdings and EVI Industries

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

The idea behind BlueLinx Holdings and EVI Industries 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.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.