Correlation Between Sea and BRAGG GAMING

Can any of the company-specific risk be diversified away by investing in both Sea and BRAGG GAMING 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 Sea and BRAGG GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sea Limited and BRAGG GAMING GRP, you can compare the effects of market volatilities on Sea and BRAGG GAMING 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 Sea with a short position of BRAGG GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and BRAGG GAMING.

Diversification Opportunities for Sea and BRAGG GAMING

-0.9

Correlation Coefficient

Sea  BRAGG GAMING

Pay attention - limited upside

The 3 months correlation between Sea and BRAGG is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sea Limited and BRAGG GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAGG GAMING GRP and Sea 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 Sea Limited are associated (or correlated) with BRAGG GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAGG GAMING GRP has no effect on the direction of Sea i.e., Sea and BRAGG GAMING go up and down completely randomly.

Pair Corralation between Sea and BRAGG GAMING

Assuming the 90 days horizon Sea Limited is expected to generate 0.97 times more return on investment than BRAGG GAMING. However, Sea Limited is 1.03 times less risky than BRAGG GAMING. It trades about 0.06 of its potential returns per unit of risk. BRAGG GAMING GRP is currently generating about 0.01 per unit of risk. If you would invest  5,260  in Sea Limited on September 26, 2024 and sell it today you would earn a total of  5,200  from holding Sea Limited or generate 98.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sea Limited  vs.  BRAGG GAMING GRP

Sea Limited

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sea Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sea reported solid returns over the last few months and may actually be approaching a breakup point.

BRAGG GAMING GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRAGG GAMING GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sea and BRAGG GAMING

The main advantage of trading using opposite Sea and BRAGG GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, BRAGG GAMING 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 BRAGG GAMING will offset losses from the drop in BRAGG GAMING's long position.

The idea behind Sea Limited and BRAGG GAMING GRP 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.