Correlation Between Bluelinx Holdings and Amazon

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Can any of the company-specific risk be diversified away by investing in both Bluelinx Holdings and Amazon 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 Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluelinx Holdings and Amazon Inc, you can compare the effects of market volatilities on Bluelinx Holdings and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluelinx Holdings and Amazon.

Diversification Opportunities for Bluelinx Holdings and Amazon

  Correlation Coefficient

Modest diversification

The 3 months correlation between Bluelinx and Amazon is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bluelinx Holdings and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Bluelinx Holdings i.e., Bluelinx Holdings and Amazon go up and down completely randomly.

Pair Corralation between Bluelinx Holdings and Amazon

Considering the 90-day investment horizon Bluelinx Holdings is expected to generate 1.65 times more return on investment than Amazon. However, Bluelinx Holdings is 1.65 times more volatile than Amazon Inc. It trades about 0.05 of its potential returns per unit of risk. Amazon Inc is currently generating about -0.04 per unit of risk. If you would invest  4,513  in Bluelinx Holdings on August 28, 2022 and sell it today you would earn a total of  2,212  from holding Bluelinx Holdings or generate 49.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Bluelinx Holdings  vs.  Amazon Inc

 Performance (%) 
Bluelinx Holdings 
Bluelinx Performance
0 of 100
Over the last 90 days Bluelinx Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bluelinx Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bluelinx Price Channel

Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

Bluelinx Holdings and Amazon Volatility Contrast

   Predicted Return Density   

Pair Trading with Bluelinx Holdings and Amazon

The main advantage of trading using opposite Bluelinx Holdings and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluelinx Holdings position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.
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The idea behind Bluelinx Holdings and Amazon Inc 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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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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