Correlation Between EGain and DatChat
Can any of the company-specific risk be diversified away by investing in both EGain and DatChat 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 DatChat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eGain and DatChat, you can compare the effects of market volatilities on EGain and DatChat 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 DatChat. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGain and DatChat.
Diversification Opportunities for EGain and DatChat
Poor diversification
The 3 months correlation between EGain and DatChat is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding eGain and DatChat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DatChat 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 DatChat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DatChat has no effect on the direction of EGain i.e., EGain and DatChat go up and down completely randomly.
Pair Corralation between EGain and DatChat
Given the investment horizon of 90 days eGain is expected to generate 0.41 times more return on investment than DatChat. However, eGain is 2.47 times less risky than DatChat. It trades about 0.08 of its potential returns per unit of risk. DatChat is currently generating about -0.08 per unit of risk. If you would invest 537.00 in eGain on September 14, 2024 and sell it today you would earn a total of 28.00 from holding eGain or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eGain vs. DatChat
Performance |
| Timeline |
| eGain |
| DatChat |
EGain and DatChat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGain and DatChat
The main advantage of trading using opposite EGain and DatChat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGain position performs unexpectedly, DatChat 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 DatChat will offset losses from the drop in DatChat's long position.| EGain vs. Issuer Direct Corp | EGain vs. Research Solutions | EGain vs. Alkami Technology | EGain vs. Agilysys |
| DatChat vs. My Size | DatChat vs. EzFill Holdings | DatChat vs. Freight Technologies | DatChat vs. Marin Software |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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