Correlation Between EGain and Lytus Technologies

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

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

Diversification Opportunities for EGain and Lytus Technologies

0.6

Correlation Coefficient

EGain  Lytus Technologies

Poor diversification

The 3 months correlation between EGain and Lytus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Lytus Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lytus Technologies 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 Lytus Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lytus Technologies has no effect on the direction of EGain i.e., EGain and Lytus Technologies go up and down completely randomly.

Pair Corralation between EGain and Lytus Technologies

Given the investment horizon of 90 days eGain is expected to generate 0.33 times more return on investment than Lytus Technologies. However, eGain is 3.02 times less risky than Lytus Technologies. It trades about -0.01 of its potential returns per unit of risk. Lytus Technologies Holdings is currently generating about -0.33 per unit of risk. If you would invest  540.00  in eGain on December 24, 2024 and sell it today you would lose (43.00) from holding eGain or give up 7.96% of portfolio value over 90 days.

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

eGain  vs.  Lytus Technologies 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 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.

Lytus Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lytus Technologies Holdings 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EGain and Lytus Technologies

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

The idea behind eGain and Lytus Technologies 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.