Correlation Between Box and Corpay

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

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

Diversification Opportunities for Box and Corpay

0.63

Correlation Coefficient

Box  Corpay

Poor diversification

The 3 months correlation between Box and Corpay is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and Corpay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corpay Inc 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 Corpay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corpay Inc has no effect on the direction of Box i.e., Box and Corpay go up and down completely randomly.

Pair Corralation between Box and Corpay

Considering the 90-day investment horizon Box Inc is expected to generate 1.01 times more return on investment than Corpay. However, Box is 1.01 times more volatile than Corpay Inc. It trades about 0.01 of its potential returns per unit of risk. Corpay Inc is currently generating about -0.01 per unit of risk. If you would invest  3,200  in Box Inc on September 22, 2024 and sell it today you would earn a total of  3.00  from holding Box Inc or generate 0.09% return on investment over 90 days.

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

Box Inc  vs.  Corpay Inc

Box Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Box Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Box is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Corpay Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corpay Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Corpay may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Box and Corpay

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

The idea behind Box Inc and Corpay 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.