Correlation Between Spotify Technology and Box

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

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

Diversification Opportunities for Spotify Technology and Box

0.35

Correlation Coefficient

Spotify Technology  Box

Weak diversification

The 3 months correlation between Spotify and Box is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc and Spotify Technology 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 Spotify Technology SA 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 Spotify Technology i.e., Spotify Technology and Box go up and down completely randomly.

Pair Corralation between Spotify Technology and Box

Given the investment horizon of 90 days Spotify Technology SA is expected to generate 1.13 times more return on investment than Box. However, Spotify Technology is 1.13 times more volatile than Box Inc. It trades about 0.09 of its potential returns per unit of risk. Box Inc is currently generating about 0.01 per unit of risk. If you would invest  62,081  in Spotify Technology SA on May 12, 2025 and sell it today you would earn a total of  8,508  from holding Spotify Technology SA or generate 13.7% return on investment over 90 days.

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

Spotify Technology SA  vs.  Box Inc

Spotify Technology

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Spotify Technology SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Spotify Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spotify Technology and Box

The main advantage of trading using opposite Spotify Technology and Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology 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 Spotify Technology SA 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.