Correlation Between BRAGG GAMING and RELIANCE STEEL

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

Diversification Opportunities for BRAGG GAMING and RELIANCE STEEL

0.08

Correlation Coefficient

BRAGG GAMING  RELIANCE STEEL

Significant diversification

The 3 months correlation between BRAGG and RELIANCE is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding BRAGG GAMING GRP and RELIANCE STEEL AL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RELIANCE STEEL AL 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 RELIANCE STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RELIANCE STEEL AL has no effect on the direction of BRAGG GAMING i.e., BRAGG GAMING and RELIANCE STEEL go up and down completely randomly.

Pair Corralation between BRAGG GAMING and RELIANCE STEEL

Assuming the 90 days horizon BRAGG GAMING GRP is expected to generate 2.31 times more return on investment than RELIANCE STEEL. However, BRAGG GAMING is 2.31 times more volatile than RELIANCE STEEL AL. It trades about 0.03 of its potential returns per unit of risk. RELIANCE STEEL AL is currently generating about 0.03 per unit of risk. If you would invest  320.00  in BRAGG GAMING GRP on December 8, 2024 and sell it today you would earn a total of  108.00  from holding BRAGG GAMING GRP or generate 33.75% return on investment over 90 days.

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

BRAGG GAMING GRP  vs.  RELIANCE STEEL AL

BRAGG GAMING GRP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BRAGG GAMING GRP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BRAGG GAMING reported solid returns over the last few months and may actually be approaching a breakup point.

RELIANCE STEEL AL

Risk-Adjusted Performance

Very Weak

Over the last 90 days RELIANCE STEEL AL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with BRAGG GAMING and RELIANCE STEEL

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

The idea behind BRAGG GAMING GRP and RELIANCE STEEL AL 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.