Correlation Between Bragg Gaming and Western Investment

Can any of the company-specific risk be diversified away by investing in both Bragg Gaming and Western Investment 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 Western Investment 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 Western Investment, you can compare the effects of market volatilities on Bragg Gaming and Western Investment 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 Western Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bragg Gaming and Western Investment.

Diversification Opportunities for Bragg Gaming and Western Investment

-0.06

Correlation Coefficient

Bragg Gaming  Western Investment

Good diversification

The 3 months correlation between Bragg and Western is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and Western Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Investment 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 Western Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Investment has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and Western Investment go up and down completely randomly.

Pair Corralation between Bragg Gaming and Western Investment

Assuming the 90 days trading horizon Bragg Gaming is expected to generate 2.26 times less return on investment than Western Investment. But when comparing it to its historical volatility, Bragg Gaming Group is 1.09 times less risky than Western Investment. It trades about 0.02 of its potential returns per unit of risk. Western Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  37.00  in Western Investment on September 16, 2024 and sell it today you would earn a total of  12.00  from holding Western Investment or generate 32.43% return on investment over 90 days.

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

Bragg Gaming Group  vs.  Western Investment

Bragg Gaming Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bragg Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Western Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Western Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bragg Gaming and Western Investment

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

The idea behind Bragg Gaming Group and Western Investment 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.