Correlation Between EGain and Bm Technologies
Can any of the company-specific risk be diversified away by investing in both EGain and Bm Technologies 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 Bm Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eGain and Bm Technologies, you can compare the effects of market volatilities on EGain and Bm Technologies 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 Bm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGain and Bm Technologies.
Diversification Opportunities for EGain and Bm Technologies
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EGain and BMTX is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Bm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bm Technologies 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 Bm Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bm Technologies has no effect on the direction of EGain i.e., EGain and Bm Technologies go up and down completely randomly.
Pair Corralation between EGain and Bm Technologies
Given the investment horizon of 90 days eGain is expected to generate 12.61 times more return on investment than Bm Technologies. However, EGain is 12.61 times more volatile than Bm Technologies. It trades about 0.13 of its potential returns per unit of risk. Bm Technologies is currently generating about 0.08 per unit of risk. If you would invest 479.00 in eGain on August 26, 2024 and sell it today you would earn a total of 54.00 from holding eGain or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eGain vs. Bm Technologies
Performance |
| Timeline |
| eGain |
| Bm Technologies |
EGain and Bm Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGain and Bm Technologies
The main advantage of trading using opposite EGain and Bm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGain position performs unexpectedly, Bm Technologies 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 Bm Technologies will offset losses from the drop in Bm Technologies' long position.The idea behind eGain and Bm Technologies 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.| Bm Technologies vs. Where Food Comes | Bm Technologies vs. eGain | Bm Technologies vs. Research Solutions | Bm Technologies vs. Infobird Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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