Correlation Between EGain and Meridianlink
Can any of the company-specific risk be diversified away by investing in both EGain and Meridianlink 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 Meridianlink into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eGain and Meridianlink, you can compare the effects of market volatilities on EGain and Meridianlink 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 Meridianlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGain and Meridianlink.
Diversification Opportunities for EGain and Meridianlink
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EGain and Meridianlink is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding eGain and Meridianlink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridianlink 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 Meridianlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridianlink has no effect on the direction of EGain i.e., EGain and Meridianlink go up and down completely randomly.
Pair Corralation between EGain and Meridianlink
Given the investment horizon of 90 days eGain is expected to under-perform the Meridianlink. In addition to that, EGain is 1.04 times more volatile than Meridianlink. It trades about -0.13 of its total potential returns per unit of risk. Meridianlink is currently generating about -0.04 per unit of volatility. If you would invest 1,958 in Meridianlink on November 9, 2024 and sell it today you would lose (38.00) from holding Meridianlink or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eGain vs. Meridianlink
Performance |
| Timeline |
| eGain |
| Meridianlink |
EGain and Meridianlink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGain and Meridianlink
The main advantage of trading using opposite EGain and Meridianlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGain position performs unexpectedly, Meridianlink 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 Meridianlink will offset losses from the drop in Meridianlink's long position.The idea behind eGain and Meridianlink 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.| Meridianlink vs. CoreCard Corp | Meridianlink vs. PROS Holdings | Meridianlink vs. Enfusion | Meridianlink vs. Paylocity Holdng |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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