Correlation Between EGain and IDEX Biometrics
Can any of the company-specific risk be diversified away by investing in both EGain and IDEX Biometrics 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 IDEX Biometrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eGain and IDEX Biometrics ASA, you can compare the effects of market volatilities on EGain and IDEX Biometrics 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 IDEX Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGain and IDEX Biometrics.
Diversification Opportunities for EGain and IDEX Biometrics
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EGain and IDEX is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding eGain and IDEX Biometrics ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX Biometrics ASA 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 IDEX Biometrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX Biometrics ASA has no effect on the direction of EGain i.e., EGain and IDEX Biometrics go up and down completely randomly.
Pair Corralation between EGain and IDEX Biometrics
If you would invest 513.00 in eGain on August 27, 2024 and sell it today you would earn a total of 20.00 from holding eGain or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
eGain vs. IDEX Biometrics ASA
Performance |
| Timeline |
| eGain |
| IDEX Biometrics ASA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EGain and IDEX Biometrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGain and IDEX Biometrics
The main advantage of trading using opposite EGain and IDEX Biometrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGain position performs unexpectedly, IDEX Biometrics 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 IDEX Biometrics will offset losses from the drop in IDEX Biometrics' long position.The idea behind eGain and IDEX Biometrics ASA 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.| IDEX Biometrics vs. Issuer Direct Corp | IDEX Biometrics vs. eGain | IDEX Biometrics vs. Research Solutions | IDEX Biometrics vs. Ackroo Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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