Correlation Between EGain and Baijiayun

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

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

Diversification Opportunities for EGain and Baijiayun

-0.53

Correlation Coefficient

EGain  Baijiayun

Excellent diversification

The 3 months correlation between EGain and Baijiayun is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Baijiayun Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baijiayun Group 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 Baijiayun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baijiayun Group has no effect on the direction of EGain i.e., EGain and Baijiayun go up and down completely randomly.

Pair Corralation between EGain and Baijiayun

Given the investment horizon of 90 days eGain is expected to under-perform the Baijiayun. In addition to that, EGain is 1.23 times more volatile than Baijiayun Group. It trades about -0.09 of its total potential returns per unit of risk. Baijiayun Group is currently generating about 0.13 per unit of volatility. If you would invest  758.00  in Baijiayun Group on August 31, 2024 and sell it today you would earn a total of  186.00  from holding Baijiayun Group or generate 24.54% return on investment over 90 days.

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

eGain  vs.  Baijiayun Group

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 fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Baijiayun Group

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baijiayun Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Baijiayun exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EGain and Baijiayun

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

The idea behind eGain and Baijiayun Group 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.