Correlation Between Box and DigiAsia Corp

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

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

Diversification Opportunities for Box and DigiAsia Corp

-0.66

Correlation Coefficient

Box  DigiAsia Corp

Excellent diversification

The 3 months correlation between Box and DigiAsia is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and DigiAsia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiAsia Corp 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 DigiAsia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiAsia Corp has no effect on the direction of Box i.e., Box and DigiAsia Corp go up and down completely randomly.

Pair Corralation between Box and DigiAsia Corp

Considering the 90-day investment horizon Box Inc is expected to generate 0.1 times more return on investment than DigiAsia Corp. However, Box Inc is 10.15 times less risky than DigiAsia Corp. It trades about 0.12 of its potential returns per unit of risk. DigiAsia Corp is currently generating about -0.04 per unit of risk. If you would invest  3,207  in Box Inc on September 1, 2024 and sell it today you would earn a total of  302.00  from holding Box Inc or generate 9.42% return on investment over 90 days.

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

Box Inc  vs.  DigiAsia Corp

Box Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Box Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Box may actually be approaching a critical reversion point that can send shares even higher in December 2024.

DigiAsia Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigiAsia Corp 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 basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Box and DigiAsia Corp

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

The idea behind Box Inc and DigiAsia Corp 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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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.