Correlation Between BRAGG GAMING and RED HILL

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

Diversification Opportunities for BRAGG GAMING and RED HILL

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Correlation Coefficient

BRAGG GAMING  RED HILL

Pay attention - limited upside

The 3 months correlation between BRAGG and RED is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BRAGG GAMING GRP and RED HILL IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RED HILL IRON 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 RED HILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RED HILL IRON has no effect on the direction of BRAGG GAMING i.e., BRAGG GAMING and RED HILL go up and down completely randomly.

Pair Corralation between BRAGG GAMING and RED HILL

Assuming the 90 days horizon BRAGG GAMING is expected to generate 10.41 times less return on investment than RED HILL. But when comparing it to its historical volatility, BRAGG GAMING GRP is 2.15 times less risky than RED HILL. It trades about 0.01 of its potential returns per unit of risk. RED HILL IRON is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3.74  in RED HILL IRON on October 11, 2024 and sell it today you would earn a total of  14.26  from holding RED HILL IRON or generate 381.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BRAGG GAMING GRP  vs.  RED HILL IRON

BRAGG GAMING GRP

Risk-Adjusted Performance

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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.

RED HILL IRON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RED HILL IRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, RED HILL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BRAGG GAMING and RED HILL

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

The idea behind BRAGG GAMING GRP and RED HILL IRON 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.