Correlation Between Dubber and EGain

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

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

Diversification Opportunities for Dubber and EGain

0.04

Correlation Coefficient

Dubber  EGain

Significant diversification

The 3 months correlation between Dubber and EGain is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dubber Limited and eGain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eGain and Dubber 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 Dubber Limited are associated (or correlated) with EGain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eGain has no effect on the direction of Dubber i.e., Dubber and EGain go up and down completely randomly.

Pair Corralation between Dubber and EGain

Assuming the 90 days horizon Dubber Limited is expected to under-perform the EGain. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dubber Limited is 1.41 times less risky than EGain. The pink sheet trades about -0.21 of its potential returns per unit of risk. The eGain is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  513.00  in eGain on September 28, 2024 and sell it today you would earn a total of  106.00  from holding eGain or generate 20.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Dubber Limited  vs.  eGain

Dubber Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dubber Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Dubber reported solid returns over the last few months and may actually be approaching a breakup point.

eGain

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in eGain are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, EGain displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dubber and EGain

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

The idea behind Dubber Limited and eGain 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 Transaction History module to view history of all your transactions and understand their impact on performance.