Correlation Between EGain and Blackboxstocks

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

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

Diversification Opportunities for EGain and Blackboxstocks

-0.47

Correlation Coefficient

EGain  Blackboxstocks

Very good diversification

The 3 months correlation between EGain and Blackboxstocks is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Blackboxstocks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackboxstocks 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 Blackboxstocks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackboxstocks has no effect on the direction of EGain i.e., EGain and Blackboxstocks go up and down completely randomly.

Pair Corralation between EGain and Blackboxstocks

Given the investment horizon of 90 days eGain is expected to under-perform the Blackboxstocks. But the stock apears to be less risky and, when comparing its historical volatility, eGain is 1.07 times less risky than Blackboxstocks. The stock trades about -0.07 of its potential returns per unit of risk. The Blackboxstocks is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  197.00  in Blackboxstocks on September 3, 2024 and sell it today you would earn a total of  65.00  from holding Blackboxstocks or generate 32.99% return on investment over 90 days.

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

eGain  vs.  Blackboxstocks

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Blackboxstocks

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackboxstocks are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, Blackboxstocks showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EGain and Blackboxstocks

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

The idea behind eGain and Blackboxstocks 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.