Correlation Between Youdao and Bragg Gaming

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

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

Diversification Opportunities for Youdao and Bragg Gaming

-0.46

Correlation Coefficient

Youdao  Bragg Gaming

Very good diversification

The 3 months correlation between Youdao and Bragg is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Youdao Inc and Bragg Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bragg Gaming Group and Youdao 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 Youdao Inc are associated (or correlated) with Bragg Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bragg Gaming Group has no effect on the direction of Youdao i.e., Youdao and Bragg Gaming go up and down completely randomly.

Pair Corralation between Youdao and Bragg Gaming

Considering the 90-day investment horizon Youdao Inc is expected to under-perform the Bragg Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Youdao Inc is 1.39 times less risky than Bragg Gaming. The stock trades about -0.01 of its potential returns per unit of risk. The Bragg Gaming Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  354.00  in Bragg Gaming Group on October 27, 2024 and sell it today you would earn a total of  94.00  from holding Bragg Gaming Group or generate 26.55% return on investment over 90 days.

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

Youdao Inc  vs.  Bragg Gaming Group

Youdao Inc

Risk-Adjusted Performance

13 of 100

Good

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

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.

Pair Trading with Youdao and Bragg Gaming

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

The idea behind Youdao Inc and Bragg Gaming Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..