Correlation Between Box and Arbe Robotics

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

By analyzing existing cross correlation between Box Inc and Arbe Robotics, you can compare the effects of market volatilities on Box and Arbe Robotics 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 Box with a short position of Arbe Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Box and Arbe Robotics.

Diversification Opportunities for Box and Arbe Robotics

-0.46

Correlation Coefficient

Box  Arbe Robotics

Very good diversification

The 3 months correlation between Box and Arbe is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and Arbe Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbe Robotics and Box 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 Box Inc are associated (or correlated) with Arbe Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbe Robotics has no effect on the direction of Box i.e., Box and Arbe Robotics go up and down completely randomly.

Pair Corralation between Box and Arbe Robotics

Considering the 90-day investment horizon Box Inc is expected to generate 0.48 times more return on investment than Arbe Robotics. However, Box Inc is 2.08 times less risky than Arbe Robotics. It trades about 0.13 of its potential returns per unit of risk. Arbe Robotics is currently generating about 0.0 per unit of risk. If you would invest  2,669  in Box Inc on September 5, 2024 and sell it today you would earn a total of  773.00  from holding Box Inc or generate 28.96% return on investment over 90 days.

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

Box Inc  vs.  Arbe Robotics

Box Inc

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Box Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Box is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Arbe Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Box and Arbe Robotics

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

The idea behind Box Inc and Arbe Robotics 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.