Correlation Between Box and Blackline
Can any of the company-specific risk be diversified away by investing in both Box and Blackline 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 Blackline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Box Inc and Blackline, you can compare the effects of market volatilities on Box and Blackline 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 Blackline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Box and Blackline.
Diversification Opportunities for Box and Blackline
Almost no diversification
The 3 months correlation between Box and Blackline is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline 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 Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of Box i.e., Box and Blackline go up and down completely randomly.
Pair Corralation between Box and Blackline
Considering the 90-day investment horizon Box Inc is expected to under-perform the Blackline. But the stock apears to be less risky and, when comparing its historical volatility, Box Inc is 2.81 times less risky than Blackline. The stock trades about -0.16 of its potential returns per unit of risk. The Blackline is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 6,233 in Blackline on January 26, 2024 and sell it today you would lose (240.00) from holding Blackline or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Box Inc vs. Blackline
Performance |
| Timeline |
| Box Inc |
| Blackline |
Box and Blackline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Box and Blackline
The main advantage of trading using opposite Box and Blackline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Box position performs unexpectedly, Blackline 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 Blackline will offset losses from the drop in Blackline's long position.The idea behind Box Inc and Blackline 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.| Blackline vs. Manhattan Associates | Blackline vs. Aspen Technology | Blackline vs. DoubleVerify Holdings | Blackline vs. ANSYS Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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