Correlation Between EGain and My Size

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

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

Diversification Opportunities for EGain and My Size

-0.38

Correlation Coefficient

EGain  My Size

Very good diversification

The 3 months correlation between EGain and MYSZ is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding eGain and My Size in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on My Size 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 My Size. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of My Size has no effect on the direction of EGain i.e., EGain and My Size go up and down completely randomly.

Pair Corralation between EGain and My Size

Given the investment horizon of 90 days eGain is expected to generate 0.42 times more return on investment than My Size. However, eGain is 2.38 times less risky than My Size. It trades about 0.06 of its potential returns per unit of risk. My Size is currently generating about -0.16 per unit of risk. If you would invest  538.00  in eGain on September 15, 2024 and sell it today you would earn a total of  19.00  from holding eGain or generate 3.53% return on investment over 90 days.

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

eGain  vs.  My Size

eGain

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in eGain are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, EGain displayed solid returns over the last few months and may actually be approaching a breakup point.

My Size

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days My Size has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with EGain and My Size

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

The idea behind eGain and My Size 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.