Correlation Between EGain and Generative
Can any of the company-specific risk be diversified away by investing in both EGain and Generative 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 Generative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eGain and Generative AI Solutions, you can compare the effects of market volatilities on EGain and Generative 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 Generative. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGain and Generative.
Diversification Opportunities for EGain and Generative
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EGain and Generative is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Generative AI Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generative AI Solutions 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 Generative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generative AI Solutions has no effect on the direction of EGain i.e., EGain and Generative go up and down completely randomly.
Pair Corralation between EGain and Generative
Given the investment horizon of 90 days EGain is expected to generate 10.0 times less return on investment than Generative. But when comparing it to its historical volatility, eGain is 6.4 times less risky than Generative. It trades about 0.06 of its potential returns per unit of risk. Generative AI Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Generative AI Solutions on September 12, 2024 and sell it today you would lose (1.25) from holding Generative AI Solutions or give up 13.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
eGain vs. Generative AI Solutions
Performance |
| Timeline |
| eGain |
| Generative AI Solutions |
EGain and Generative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGain and Generative
The main advantage of trading using opposite EGain and Generative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGain position performs unexpectedly, Generative 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 Generative will offset losses from the drop in Generative's long position.| EGain vs. Issuer Direct Corp | EGain vs. Research Solutions | EGain vs. Alkami Technology | EGain vs. Agilysys |
| Generative vs. Finnair Oyj | Generative vs. Porvair plc | Generative vs. Air Lease | Generative vs. Acco Brands |
Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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