Correlation Between Bragg Gaming and First Community

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

Diversification Opportunities for Bragg Gaming and First Community

-0.48

Correlation Coefficient

Bragg Gaming  First Community

Very good diversification

The 3 months correlation between Bragg and First is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and First Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community Banc 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community Banc has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and First Community go up and down completely randomly.

Pair Corralation between Bragg Gaming and First Community

Given the investment horizon of 90 days Bragg Gaming Group is expected to generate 2.29 times more return on investment than First Community. However, Bragg Gaming is 2.29 times more volatile than First Community Bancshares. It trades about 0.18 of its potential returns per unit of risk. First Community Bancshares is currently generating about -0.25 per unit of risk. If you would invest  328.00  in Bragg Gaming Group on October 8, 2024 and sell it today you would earn a total of  48.00  from holding Bragg Gaming Group or generate 14.63% return on investment over 90 days.

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

Bragg Gaming Group  vs.  First Community Bancshares

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 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.

First Community Banc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days First Community Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, First Community is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bragg Gaming and First Community

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

The idea behind Bragg Gaming Group and First Community Bancshares 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.