Correlation Between Box and Network 1

Can any of the company-specific risk be diversified away by investing in both Box and Network 1 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 Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Box Inc and Network 1 Technologies, you can compare the effects of market volatilities on Box and Network 1 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 Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Box and Network 1.

Diversification Opportunities for Box and Network 1

-0.48

Correlation Coefficient

Box  Network 1

Very good diversification

The 3 months correlation between Box and Network is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Box Inc and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies 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 Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of Box i.e., Box and Network 1 go up and down completely randomly.

Pair Corralation between Box and Network 1

Considering the 90-day investment horizon Box Inc is expected to under-perform the Network 1. In addition to that, Box is 1.15 times more volatile than Network 1 Technologies. It trades about -0.01 of its total potential returns per unit of risk. Network 1 Technologies is currently generating about 0.12 per unit of volatility. If you would invest  123.00  in Network 1 Technologies on May 16, 2025 and sell it today you would earn a total of  19.00  from holding Network 1 Technologies or generate 15.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Box Inc  vs.  Network 1 Technologies

Box Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Box Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Box is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Network 1 Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Box and Network 1

The main advantage of trading using opposite Box and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Box position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind Box Inc and Network 1 Technologies 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.