Correlation Between BRAGG GAMING and Iridium Communications

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Can any of the company-specific risk be diversified away by investing in both BRAGG GAMING and Iridium Communications 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 Iridium Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRAGG GAMING GRP and Iridium Communications, you can compare the effects of market volatilities on BRAGG GAMING and Iridium Communications 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 Iridium Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRAGG GAMING and Iridium Communications.

Diversification Opportunities for BRAGG GAMING and Iridium Communications

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between BRAGG and Iridium is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BRAGG GAMING GRP and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications 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 GRP are associated (or correlated) with Iridium Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iridium Communications has no effect on the direction of BRAGG GAMING i.e., BRAGG GAMING and Iridium Communications go up and down completely randomly.

Pair Corralation between BRAGG GAMING and Iridium Communications

Assuming the 90 days horizon BRAGG GAMING GRP is expected to generate 2.29 times more return on investment than Iridium Communications. However, BRAGG GAMING is 2.29 times more volatile than Iridium Communications. It trades about 0.2 of its potential returns per unit of risk. Iridium Communications is currently generating about 0.03 per unit of risk. If you would invest  308.00  in BRAGG GAMING GRP on October 8, 2024 and sell it today you would earn a total of  42.00  from holding BRAGG GAMING GRP or generate 13.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

BRAGG GAMING GRP  vs.  Iridium Communications

 Performance 
       Timeline  
BRAGG GAMING GRP 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BRAGG GAMING GRP 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.
Iridium Communications 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Iridium Communications are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Iridium Communications reported solid returns over the last few months and may actually be approaching a breakup point.

BRAGG GAMING and Iridium Communications Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BRAGG GAMING and Iridium Communications

The main advantage of trading using opposite BRAGG GAMING and Iridium Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRAGG GAMING position performs unexpectedly, Iridium Communications 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 Iridium Communications will offset losses from the drop in Iridium Communications' long position.
The idea behind BRAGG GAMING GRP and Iridium Communications 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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