Correlation Between EGain and Kingsoft Cloud

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

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

Diversification Opportunities for EGain and Kingsoft Cloud

-0.63

Correlation Coefficient

EGain  Kingsoft Cloud

Excellent diversification

The 3 months correlation between EGain and Kingsoft is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Kingsoft Cloud Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsoft Cloud Holdings 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 Kingsoft Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsoft Cloud Holdings has no effect on the direction of EGain i.e., EGain and Kingsoft Cloud go up and down completely randomly.

Pair Corralation between EGain and Kingsoft Cloud

Given the investment horizon of 90 days eGain is expected to under-perform the Kingsoft Cloud. But the stock apears to be less risky and, when comparing its historical volatility, eGain is 2.08 times less risky than Kingsoft Cloud. The stock trades about -0.07 of its potential returns per unit of risk. The Kingsoft Cloud Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,146  in Kingsoft Cloud Holdings on December 28, 2024 and sell it today you would earn a total of  251.00  from holding Kingsoft Cloud Holdings or generate 21.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

eGain  vs.  Kingsoft Cloud Holdings

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 fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kingsoft Cloud Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsoft Cloud Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Kingsoft Cloud exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EGain and Kingsoft Cloud

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

The idea behind eGain and Kingsoft Cloud Holdings 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.