Correlation Between BRAGG GAMING and DR Horton

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

Diversification Opportunities for BRAGG GAMING and DR Horton

0.42

Correlation Coefficient

BRAGG GAMING  DR Horton

Very weak diversification

The 3 months correlation between BRAGG and HO2 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BRAGG GAMING GRP and DR Horton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DR Horton 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 DR Horton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DR Horton has no effect on the direction of BRAGG GAMING i.e., BRAGG GAMING and DR Horton go up and down completely randomly.

Pair Corralation between BRAGG GAMING and DR Horton

Assuming the 90 days horizon BRAGG GAMING is expected to generate 1.22 times less return on investment than DR Horton. In addition to that, BRAGG GAMING is 1.71 times more volatile than DR Horton. It trades about 0.03 of its total potential returns per unit of risk. DR Horton is currently generating about 0.06 per unit of volatility. If you would invest  8,844  in DR Horton on October 23, 2024 and sell it today you would earn a total of  5,656  from holding DR Horton or generate 63.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

BRAGG GAMING GRP  vs.  DR Horton

BRAGG GAMING GRP

Risk-Adjusted Performance

0 of 100

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 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.

DR Horton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DR Horton has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BRAGG GAMING and DR Horton

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

The idea behind BRAGG GAMING GRP and DR Horton 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 CEOs Directory module to screen CEOs from public companies around the world.