Correlation Between EGain and DecisionPoint Systems

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

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

Diversification Opportunities for EGain and DecisionPoint Systems

-0.17

Correlation Coefficient

EGain  DecisionPoint Systems

Good diversification

The 3 months correlation between EGain and DecisionPoint is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding eGain and DecisionPoint Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecisionPoint Systems 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 DecisionPoint Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecisionPoint Systems has no effect on the direction of EGain i.e., EGain and DecisionPoint Systems go up and down completely randomly.

Pair Corralation between EGain and DecisionPoint Systems

If you would invest  1,023  in DecisionPoint Systems on September 4, 2024 and sell it today you would earn a total of  0.00  from holding DecisionPoint Systems or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

eGain  vs.  DecisionPoint Systems

eGain

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

DecisionPoint Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DecisionPoint Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, DecisionPoint Systems is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with EGain and DecisionPoint Systems

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

The idea behind eGain and DecisionPoint Systems 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .