Correlation Between Evertec and Box

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

Diversification Opportunities for Evertec and Box

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Evertec and Box is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc and Evertec 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 Evertec 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 Evertec i.e., Evertec and Box go up and down completely randomly.

Pair Corralation between Evertec and Box

Given the investment horizon of 90 days Evertec is expected to under-perform the Box. In addition to that, Evertec is 1.13 times more volatile than Box Inc. It trades about -0.01 of its total potential returns per unit of risk. Box Inc is currently generating about 0.22 per unit of volatility. If you would invest  2,534  in Box Inc on December 30, 2023 and sell it today you would earn a total of  298.00  from holding Box Inc or generate 11.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Evertec  vs.  Box Inc

 Performance 
       Timeline  
Evertec 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Evertec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
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 abnormal basic indicators, Box may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Evertec and Box Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Evertec and Box

The main advantage of trading using opposite Evertec and Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertec 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 Evertec 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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