Correlation Between Integrated Ventures and EGain

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

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

Diversification Opportunities for Integrated Ventures and EGain

0.49

Correlation Coefficient

Integrated Ventures  EGain

Very weak diversification

The 3 months correlation between Integrated and EGain is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Ventures and eGain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eGain and Integrated Ventures 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 Integrated Ventures are associated (or correlated) with EGain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eGain has no effect on the direction of Integrated Ventures i.e., Integrated Ventures and EGain go up and down completely randomly.

Pair Corralation between Integrated Ventures and EGain

Given the investment horizon of 90 days Integrated Ventures is expected to generate 1.55 times more return on investment than EGain. However, Integrated Ventures is 1.55 times more volatile than eGain. It trades about 0.08 of its potential returns per unit of risk. eGain is currently generating about 0.06 per unit of risk. If you would invest  98.00  in Integrated Ventures on September 15, 2024 and sell it today you would earn a total of  19.00  from holding Integrated Ventures or generate 19.39% return on investment over 90 days.

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

Integrated Ventures  vs.  eGain

Integrated Ventures

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Ventures are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Integrated Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

eGain

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in eGain are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, EGain displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integrated Ventures and EGain

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

The idea behind Integrated Ventures and eGain 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..