Correlation Between Bragg Gaming and Bassett Furniture

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

Diversification Opportunities for Bragg Gaming and Bassett Furniture

-0.29

Correlation Coefficient

Bragg Gaming  Bassett Furniture

Very good diversification

The 3 months correlation between Bragg and Bassett is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture 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 Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and Bassett Furniture go up and down completely randomly.

Pair Corralation between Bragg Gaming and Bassett Furniture

Given the investment horizon of 90 days Bragg Gaming Group is expected to generate 1.84 times more return on investment than Bassett Furniture. However, Bragg Gaming is 1.84 times more volatile than Bassett Furniture Industries. It trades about 0.03 of its potential returns per unit of risk. Bassett Furniture Industries is currently generating about -0.02 per unit of risk. If you would invest  394.00  in Bragg Gaming Group on October 26, 2024 and sell it today you would earn a total of  54.00  from holding Bragg Gaming Group or generate 13.71% 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.  Bassett Furniture Industries

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. Despite nearly stable basic indicators, Bragg Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Bassett Furniture

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bassett Furniture Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Bassett Furniture is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bragg Gaming and Bassett Furniture

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

The idea behind Bragg Gaming Group and Bassett Furniture Industries 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.