Correlation Between GAMING FAC and BRAGG GAMING

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

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

Diversification Opportunities for GAMING FAC and BRAGG GAMING

0.7

Correlation Coefficient

GAMING FAC  BRAGG GAMING

Poor diversification

The 3 months correlation between GAMING and BRAGG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA 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 GAMING FAC 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 GAMING FAC SA 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 GAMING FAC i.e., GAMING FAC and BRAGG GAMING go up and down completely randomly.

Pair Corralation between GAMING FAC and BRAGG GAMING

Assuming the 90 days horizon GAMING FAC SA is expected to under-perform the BRAGG GAMING. But the stock apears to be less risky and, when comparing its historical volatility, GAMING FAC SA is 2.01 times less risky than BRAGG GAMING. The stock trades about -0.1 of its potential returns per unit of risk. The BRAGG GAMING GRP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  314.00  in BRAGG GAMING GRP on October 5, 2024 and sell it today you would earn a total of  16.00  from holding BRAGG GAMING GRP or generate 5.1% return on investment over 90 days.

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

GAMING FAC SA  vs.  BRAGG GAMING GRP

GAMING FAC SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMING FAC SA 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GAMING FAC and BRAGG GAMING

The main advantage of trading using opposite GAMING FAC and BRAGG GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC 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 GAMING FAC SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..