Correlation Between Bragg Gaming and Deluxe

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

Diversification Opportunities for Bragg Gaming and Deluxe

-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bragg and Deluxe is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe 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 Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and Deluxe go up and down completely randomly.

Pair Corralation between Bragg Gaming and Deluxe

Given the investment horizon of 90 days Bragg Gaming is expected to generate 9.82 times less return on investment than Deluxe. In addition to that, Bragg Gaming is 2.29 times more volatile than Deluxe. It trades about 0.01 of its total potential returns per unit of risk. Deluxe is currently generating about 0.12 per unit of volatility. If you would invest  1,892  in Deluxe on October 27, 2024 and sell it today you would earn a total of  318.00  from holding Deluxe or generate 16.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bragg Gaming Group  vs.  Deluxe

 Performance 
       Timeline  
Bragg Gaming Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Deluxe 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Deluxe are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Deluxe showed solid returns over the last few months and may actually be approaching a breakup point.

Bragg Gaming and Deluxe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bragg Gaming and Deluxe

The main advantage of trading using opposite Bragg Gaming and Deluxe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bragg Gaming position performs unexpectedly, Deluxe 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 Deluxe will offset losses from the drop in Deluxe's long position.
The idea behind Bragg Gaming Group and Deluxe 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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