Correlation Between Five9 and Box
Can any of the company-specific risk be diversified away by investing in both Five9 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 Five9 and Box into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five9 Inc and Box Inc, you can compare the effects of market volatilities on Five9 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 Five9 with a short position of Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five9 and Box.
Diversification Opportunities for Five9 and Box
Very good diversification
The 3 months correlation between Five9 and Box is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Five9 Inc and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc and Five9 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 Five9 Inc 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 Five9 i.e., Five9 and Box go up and down completely randomly.
Pair Corralation between Five9 and Box
Given the investment horizon of 90 days Five9 Inc is expected to under-perform the Box. In addition to that, Five9 is 1.68 times more volatile than Box Inc. It trades about -0.02 of its total potential returns per unit of risk. Box Inc is currently generating about -0.01 per unit of volatility. If you would invest 3,188 in Box Inc on January 24, 2024 and sell it today you would lose (476.00) from holding Box Inc or give up 14.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Five9 Inc vs. Box Inc
Performance |
| Timeline |
| Five9 Inc |
| Box Inc |
Five9 and Box Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five9 and Box
The main advantage of trading using opposite Five9 and Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five9 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 Five9 Inc 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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