Correlation Between EGain and Issuer Direct

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

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

Diversification Opportunities for EGain and Issuer Direct

0.58

Correlation Coefficient

EGain  Issuer Direct

Very weak diversification

The 3 months correlation between EGain and Issuer is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Issuer Direct Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Issuer Direct Corp 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 Issuer Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Issuer Direct Corp has no effect on the direction of EGain i.e., EGain and Issuer Direct go up and down completely randomly.

Pair Corralation between EGain and Issuer Direct

Given the investment horizon of 90 days eGain is expected to generate 1.09 times more return on investment than Issuer Direct. However, EGain is 1.09 times more volatile than Issuer Direct Corp. It trades about 0.01 of its potential returns per unit of risk. Issuer Direct Corp is currently generating about -0.25 per unit of risk. If you would invest  615.00  in eGain on March 17, 2024 and sell it today you would earn a total of  0.00  from holding eGain or generate 0.0% return on investment over 90 days.

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

eGain  vs.  Issuer Direct Corp

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 very healthy basic indicators, EGain is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Issuer Direct Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Issuer Direct Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with EGain and Issuer Direct

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

The idea behind eGain and Issuer Direct Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.