Correlation Between BRAGG GAMING and Microsoft

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

Diversification Opportunities for BRAGG GAMING and Microsoft

-0.52

Correlation Coefficient

BRAGG GAMING  Microsoft

Excellent diversification

The 3 months correlation between BRAGG and Microsoft is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BRAGG GAMING GRP and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of BRAGG GAMING i.e., BRAGG GAMING and Microsoft go up and down completely randomly.

Pair Corralation between BRAGG GAMING and Microsoft

Assuming the 90 days horizon BRAGG GAMING GRP is expected to generate 6.53 times more return on investment than Microsoft. However, BRAGG GAMING is 6.53 times more volatile than Microsoft. It trades about 0.24 of its potential returns per unit of risk. Microsoft is currently generating about 0.05 per unit of risk. If you would invest  330.00  in BRAGG GAMING GRP on October 22, 2024 and sell it today you would earn a total of  64.00  from holding BRAGG GAMING GRP or generate 19.39% 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 GRP  vs.  Microsoft

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.

Microsoft

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Microsoft may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BRAGG GAMING and Microsoft

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

The idea behind BRAGG GAMING GRP and Microsoft 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.