Correlation Between Where Food and EGain

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

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

Diversification Opportunities for Where Food and EGain

-0.15

Correlation Coefficient

Where Food  EGain

Good diversification

The 3 months correlation between Where and EGain is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes and eGain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eGain and Where Food 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 Where Food Comes 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 Where Food i.e., Where Food and EGain go up and down completely randomly.

Pair Corralation between Where Food and EGain

Given the investment horizon of 90 days Where Food Comes is expected to generate 0.41 times more return on investment than EGain. However, Where Food Comes is 2.44 times less risky than EGain. It trades about 0.06 of its potential returns per unit of risk. eGain is currently generating about -0.09 per unit of risk. If you would invest  1,136  in Where Food Comes on August 31, 2024 and sell it today you would earn a total of  63.00  from holding Where Food Comes or generate 5.55% return on investment over 90 days.

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

Where Food Comes  vs.  eGain

Where Food Comes

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Where Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Where Food and EGain

The main advantage of trading using opposite Where Food and EGain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Where Food 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 Where Food Comes 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.