Correlation Between Enbridge and Bragg Gaming

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

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

Diversification Opportunities for Enbridge and Bragg Gaming

0.4

Correlation Coefficient

Enbridge  Bragg Gaming

Very weak diversification

The 3 months correlation between Enbridge and Bragg is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge 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 Enbridge 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 Enbridge 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 Enbridge i.e., Enbridge and Bragg Gaming go up and down completely randomly.

Pair Corralation between Enbridge and Bragg Gaming

Assuming the 90 days trading horizon Enbridge is expected to generate 0.41 times more return on investment than Bragg Gaming. However, Enbridge is 2.41 times less risky than Bragg Gaming. It trades about -0.07 of its potential returns per unit of risk. Bragg Gaming Group is currently generating about -0.32 per unit of risk. If you would invest  6,321  in Enbridge on December 11, 2024 and sell it today you would lose (158.00) from holding Enbridge or give up 2.5% of portfolio value over 90 days.

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

Enbridge  vs.  Bragg Gaming Group

Enbridge

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Enbridge is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bragg Gaming Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bragg Gaming Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Bragg Gaming displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enbridge and Bragg Gaming

The main advantage of trading using opposite Enbridge and Bragg Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge 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 Enbridge 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 Transaction History module to view history of all your transactions and understand their impact on performance.