Correlation Between EGain and Marketwise

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

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

Diversification Opportunities for EGain and Marketwise

-0.33

Correlation Coefficient

EGain  Marketwise

Very good diversification

The 3 months correlation between EGain and Marketwise is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Marketwise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marketwise 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 Marketwise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marketwise has no effect on the direction of EGain i.e., EGain and Marketwise go up and down completely randomly.

Pair Corralation between EGain and Marketwise

Given the investment horizon of 90 days eGain is expected to under-perform the Marketwise. But the stock apears to be less risky and, when comparing its historical volatility, eGain is 1.89 times less risky than Marketwise. The stock trades about -0.07 of its potential returns per unit of risk. The Marketwise is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  55.00  in Marketwise on December 29, 2024 and sell it today you would lose (5.00) from holding Marketwise or give up 9.09% of portfolio value over 90 days.

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

eGain  vs.  Marketwise

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.

Marketwise

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marketwise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Marketwise is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with EGain and Marketwise

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

The idea behind eGain and Marketwise 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.