Correlation Between PowerFleet and Boxlight Corp

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

By analyzing existing cross correlation between PowerFleet and Boxlight Corp Class, you can compare the effects of market volatilities on PowerFleet and Boxlight 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 PowerFleet with a short position of Boxlight Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerFleet and Boxlight Corp.

Diversification Opportunities for PowerFleet and Boxlight Corp

-0.34

Correlation Coefficient

PowerFleet  Boxlight Corp

Very good diversification

The 3 months correlation between PowerFleet and Boxlight is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PowerFleet and Boxlight Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxlight Corp Class and PowerFleet 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 PowerFleet are associated (or correlated) with Boxlight Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxlight Corp Class has no effect on the direction of PowerFleet i.e., PowerFleet and Boxlight Corp go up and down completely randomly.

Pair Corralation between PowerFleet and Boxlight Corp

Given the investment horizon of 90 days PowerFleet is expected to under-perform the Boxlight Corp. But the stock apears to be less risky and, when comparing its historical volatility, PowerFleet is 1.72 times less risky than Boxlight Corp. The stock trades about -0.19 of its potential returns per unit of risk. The Boxlight Corp Class is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Boxlight Corp Class on March 11, 2024 and sell it today you would earn a total of  7.00  from holding Boxlight Corp Class or generate 11.29% return on investment over 90 days.

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

PowerFleet  vs.  Boxlight Corp Class

PowerFleet

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PowerFleet are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent technical and fundamental indicators, PowerFleet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Boxlight Corp Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boxlight Corp Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in July 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PowerFleet and Boxlight Corp

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

The idea behind PowerFleet and Boxlight Corp Class 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.