Correlation Between EGain and AMSWA Old

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

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

Diversification Opportunities for EGain and AMSWA Old

0.0

Correlation Coefficient

EGain  AMSWA Old

Pay attention - limited upside

The 3 months correlation between EGain and AMSWA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding eGain and AMSWA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMSWA Old and EGain 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 eGain are associated (or correlated) with AMSWA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMSWA Old has no effect on the direction of EGain i.e., EGain and AMSWA Old go up and down completely randomly.

Pair Corralation between EGain and AMSWA Old

If you would invest  533.00  in eGain on November 29, 2024 and sell it today you would lose (29.00) from holding eGain or give up 5.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

eGain  vs.  AMSWA Old

eGain

Risk-Adjusted Performance

Very Weak

Over the last 90 days eGain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EGain is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

AMSWA Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMSWA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMSWA Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EGain and AMSWA Old

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

The idea behind eGain and AMSWA Old 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.