Correlation Between Coupa Software and Box

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

Diversification Opportunities for Coupa Software and Box

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Coupa and Box is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Coupa Software and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc and Coupa Software 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 Coupa Software are associated (or correlated) with Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Box Inc has no effect on the direction of Coupa Software i.e., Coupa Software and Box go up and down completely randomly.

Pair Corralation between Coupa Software and Box

If you would invest  2,522  in Box Inc on December 29, 2023 and sell it today you would earn a total of  318.00  from holding Box Inc or generate 12.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy4.55%
ValuesDaily Returns

Coupa Software  vs.  Box Inc

 Performance 
       Timeline  
Coupa Software 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Coupa Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Coupa Software is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Box Inc 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Box Inc are ranked lower than 7 (%) 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 April 2024.

Coupa Software and Box Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coupa Software and Box

The main advantage of trading using opposite Coupa Software and Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupa Software position performs unexpectedly, Box 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 Box will offset losses from the drop in Box's long position.
The idea behind Coupa Software and Box 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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