Correlation Between VERB TECHNOLOGY and EGain

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

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

Diversification Opportunities for VERB TECHNOLOGY and EGain

-0.46

Correlation Coefficient

VERB TECHNOLOGY  EGain

Very good diversification

The 3 months correlation between VERB and EGain is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding VERB TECHNOLOGY PANY and eGain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eGain and VERB TECHNOLOGY 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 VERB TECHNOLOGY PANY 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 VERB TECHNOLOGY i.e., VERB TECHNOLOGY and EGain go up and down completely randomly.

Pair Corralation between VERB TECHNOLOGY and EGain

Given the investment horizon of 90 days VERB TECHNOLOGY PANY is expected to under-perform the EGain. In addition to that, VERB TECHNOLOGY is 6.54 times more volatile than eGain. It trades about -0.01 of its total potential returns per unit of risk. eGain is currently generating about -0.01 per unit of volatility. If you would invest  985.00  in eGain on October 3, 2024 and sell it today you would lose (362.00) from holding eGain or give up 36.75% of portfolio value over 90 days.

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

VERB TECHNOLOGY PANY  vs.  eGain

VERB TECHNOLOGY PANY

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days VERB TECHNOLOGY PANY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, VERB TECHNOLOGY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

eGain

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in eGain are ranked lower than 9 (%) 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 VERB TECHNOLOGY and EGain

The main advantage of trading using opposite VERB TECHNOLOGY and EGain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VERB TECHNOLOGY 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 VERB TECHNOLOGY PANY 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 Global Correlations module to find global opportunities by holding instruments from different markets.