Correlation Between Boxed and Amazon

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Can any of the company-specific risk be diversified away by investing in both Boxed and Amazon 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 Boxed and Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boxed Inc and Amazon Inc, you can compare the effects of market volatilities on Boxed and Amazon 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 Boxed with a short position of Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boxed and Amazon.

Diversification Opportunities for Boxed and Amazon

  Correlation Coefficient

Very poor diversification

The 3 months correlation between Boxed and Amazon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Boxed Inc and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Boxed 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 Boxed Inc are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Boxed i.e., Boxed and Amazon go up and down completely randomly.

Pair Corralation between Boxed and Amazon

Given the investment horizon of 90 days Boxed Inc is expected to under-perform the Amazon. In addition to that, Boxed is 2.47 times more volatile than Amazon Inc. It trades about -0.08 of its total potential returns per unit of risk. Amazon Inc is currently generating about -0.03 per unit of volatility. If you would invest  15,886  in Amazon Inc on August 30, 2022 and sell it today you would lose (6,491)  from holding Amazon Inc or give up 40.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Boxed Inc  vs.  Amazon Inc

 Performance (%) 
Boxed Inc 
Boxed Performance
0 of 100
Over the last 90 days Boxed Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Boxed Price Channel

Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

Boxed and Amazon Volatility Contrast

   Predicted Return Density   

Pair Trading with Boxed and Amazon

The main advantage of trading using opposite Boxed and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boxed position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.
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The idea behind Boxed Inc and Amazon 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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