Correlation Between Bragg Gaming and Enthusiast Gaming

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

By analyzing existing cross correlation between Bragg Gaming Group and Enthusiast Gaming Holdings, you can compare the effects of market volatilities on Bragg Gaming and Enthusiast 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 Bragg Gaming with a short position of Enthusiast Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bragg Gaming and Enthusiast Gaming.

Diversification Opportunities for Bragg Gaming and Enthusiast Gaming

-0.7

Correlation Coefficient

Bragg Gaming  Enthusiast Gaming

Excellent diversification

The 3 months correlation between Bragg and Enthusiast is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and Enthusiast Gaming Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enthusiast Gaming and Bragg Gaming 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 Bragg Gaming Group are associated (or correlated) with Enthusiast Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enthusiast Gaming has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and Enthusiast Gaming go up and down completely randomly.

Pair Corralation between Bragg Gaming and Enthusiast Gaming

Assuming the 90 days trading horizon Bragg Gaming Group is expected to generate 0.9 times more return on investment than Enthusiast Gaming. However, Bragg Gaming Group is 1.11 times less risky than Enthusiast Gaming. It trades about 0.17 of its potential returns per unit of risk. Enthusiast Gaming Holdings is currently generating about -0.02 per unit of risk. If you would invest  450.00  in Bragg Gaming Group on December 2, 2024 and sell it today you would earn a total of  240.00  from holding Bragg Gaming Group or generate 53.33% return on investment over 90 days.

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

Bragg Gaming Group  vs.  Enthusiast Gaming Holdings

Bragg Gaming Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bragg Gaming Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Bragg Gaming displayed solid returns over the last few months and may actually be approaching a breakup point.

Enthusiast Gaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enthusiast Gaming Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Bragg Gaming and Enthusiast Gaming

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

The idea behind Bragg Gaming Group and Enthusiast Gaming Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.