Correlation Between ThredUp and Boxed
Can any of the company-specific risk be diversified away by investing in both ThredUp and Boxed 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 ThredUp and Boxed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ThredUp and Boxed Inc, you can compare the effects of market volatilities on ThredUp and Boxed 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 ThredUp with a short position of Boxed. Check out your portfolio center. Please also check ongoing floating volatility patterns of ThredUp and Boxed.
Diversification Opportunities for ThredUp and Boxed
Significant diversification
The 3 months correlation between ThredUp and Boxed is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ThredUp and Boxed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxed Inc and ThredUp 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 ThredUp are associated (or correlated) with Boxed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxed Inc has no effect on the direction of ThredUp i.e., ThredUp and Boxed go up and down completely randomly.
Pair Corralation between ThredUp and Boxed
Given the investment horizon of 90 days ThredUp is expected to generate 13.89 times less return on investment than Boxed. But when comparing it to its historical volatility, ThredUp is 10.92 times less risky than Boxed. It trades about 0.05 of its potential returns per unit of risk. Boxed Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.20 in Boxed Inc on November 2, 2024 and sell it today you would lose (2.19) from holding Boxed Inc or give up 99.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 3.85% |
| Values | Daily Returns |
ThredUp vs. Boxed Inc
Performance |
| Timeline |
| ThredUp |
| Boxed Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ThredUp and Boxed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ThredUp and Boxed
The main advantage of trading using opposite ThredUp and Boxed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ThredUp position performs unexpectedly, Boxed 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 Boxed will offset losses from the drop in Boxed's long position.The idea behind ThredUp and Boxed 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.| Boxed vs. Frontier Group Holdings | Boxed vs. Volaris | Boxed vs. Ameriprise Financial | Boxed vs. PennantPark Floating Rate |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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