Correlation Between Perfect Corp and EGain

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

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

Diversification Opportunities for Perfect Corp and EGain

0.76

Correlation Coefficient

Perfect Corp  EGain

Poor diversification

The 3 months correlation between Perfect and EGain is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Perfect Corp and eGain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eGain and Perfect Corp 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 Perfect Corp 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 Perfect Corp i.e., Perfect Corp and EGain go up and down completely randomly.

Pair Corralation between Perfect Corp and EGain

Given the investment horizon of 90 days Perfect Corp is expected to under-perform the EGain. In addition to that, Perfect Corp is 1.52 times more volatile than eGain. It trades about -0.02 of its total potential returns per unit of risk. eGain is currently generating about -0.01 per unit of volatility. If you would invest  987.00  in eGain on October 24, 2024 and sell it today you would lose (337.00) from holding eGain or give up 34.14% of portfolio value over 90 days.

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

Perfect Corp  vs.  eGain

Perfect Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perfect Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Perfect Corp reported solid returns over the last few months and may actually be approaching a breakup point.

eGain

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in eGain are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, EGain displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perfect Corp and EGain

The main advantage of trading using opposite Perfect Corp and EGain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perfect Corp 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 Perfect Corp 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.