Correlation Between EGain and IDEX Biometrics

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

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

Diversification Opportunities for EGain and IDEX Biometrics

0.13

Correlation Coefficient

EGain  IDEX Biometrics

Average diversification

The 3 months correlation between EGain and IDEX is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding eGain and IDEX Biometrics ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX Biometrics ASA 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 IDEX Biometrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX Biometrics ASA has no effect on the direction of EGain i.e., EGain and IDEX Biometrics go up and down completely randomly.

Pair Corralation between EGain and IDEX Biometrics

If you would invest  17.00  in IDEX Biometrics ASA on June 22, 2024 and sell it today you would earn a total of  0.00  from holding IDEX Biometrics ASA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

eGain  vs.  IDEX Biometrics ASA

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

IDEX Biometrics ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IDEX Biometrics ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IDEX Biometrics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EGain and IDEX Biometrics

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

The idea behind eGain and IDEX Biometrics ASA 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.