Correlation Between TSR and EGain
Can any of the company-specific risk be diversified away by investing in both TSR and EGain 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 TSR and EGain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSR Inc and eGain, you can compare the effects of market volatilities on TSR and EGain 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 TSR with a short position of EGain. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSR and EGain.
Diversification Opportunities for TSR and EGain
Good diversification
The 3 months correlation between TSR and EGain is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding TSR Inc and eGain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eGain and TSR 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 TSR Inc are associated (or correlated) with EGain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eGain has no effect on the direction of TSR i.e., TSR and EGain go up and down completely randomly.
Pair Corralation between TSR and EGain
Given the investment horizon of 90 days TSR Inc is expected to generate 1.54 times more return on investment than EGain. However, TSR is 1.54 times more volatile than eGain. It trades about 0.08 of its potential returns per unit of risk. eGain is currently generating about -0.01 per unit of risk. If you would invest 643.00 in TSR Inc on August 31, 2024 and sell it today you would earn a total of 695.00 from holding TSR Inc or generate 108.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.59% |
| Values | Daily Returns |
TSR Inc vs. eGain
Performance |
| Timeline |
| TSR Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| eGain |
TSR and EGain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSR and EGain
The main advantage of trading using opposite TSR and EGain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSR position performs unexpectedly, EGain 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 EGain will offset losses from the drop in EGain's long position.The idea behind TSR Inc and eGain 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.| EGain vs. Issuer Direct Corp | EGain vs. Research Solutions | EGain vs. Alkami Technology | EGain vs. Agilysys |
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.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |