Correlation Between Dropbox and ACI Worldwide

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

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

Diversification Opportunities for Dropbox and ACI Worldwide

0.9

Correlation Coefficient

Dropbox  ACI Worldwide

Almost no diversification

The 3 months correlation between Dropbox and ACI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dropbox and ACI Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACI Worldwide and Dropbox 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 Dropbox are associated (or correlated) with ACI Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACI Worldwide has no effect on the direction of Dropbox i.e., Dropbox and ACI Worldwide go up and down completely randomly.

Pair Corralation between Dropbox and ACI Worldwide

Considering the 90-day investment horizon Dropbox is expected to generate 1.24 times less return on investment than ACI Worldwide. In addition to that, Dropbox is 1.16 times more volatile than ACI Worldwide. It trades about 0.17 of its total potential returns per unit of risk. ACI Worldwide is currently generating about 0.25 per unit of volatility. If you would invest  4,898  in ACI Worldwide on July 3, 2025 and sell it today you would earn a total of  379.00  from holding ACI Worldwide or generate 7.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Dropbox  vs.  ACI Worldwide

Dropbox

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Dropbox are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental drivers, Dropbox is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ACI Worldwide

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ACI Worldwide are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, ACI Worldwide showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dropbox and ACI Worldwide

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

The idea behind Dropbox and ACI Worldwide 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 Stocks Directory module to find actively traded stocks across global markets.