Correlation Between Teradyne and Bragg Gaming

Can any of the company-specific risk be diversified away by investing in both Teradyne and Bragg Gaming 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 Teradyne and Bragg Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Teradyne and Bragg Gaming Group, you can compare the effects of market volatilities on Teradyne and Bragg Gaming 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 Teradyne with a short position of Bragg Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Bragg Gaming.

Diversification Opportunities for Teradyne and Bragg Gaming

-0.01

Correlation Coefficient

Teradyne  Bragg Gaming

Good diversification

The 3 months correlation between Teradyne and Bragg is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Bragg Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bragg Gaming Group and Teradyne 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 Teradyne are associated (or correlated) with Bragg Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bragg Gaming Group has no effect on the direction of Teradyne i.e., Teradyne and Bragg Gaming go up and down completely randomly.

Pair Corralation between Teradyne and Bragg Gaming

Considering the 90-day investment horizon Teradyne is expected to generate 4.97 times less return on investment than Bragg Gaming. But when comparing it to its historical volatility, Teradyne is 2.1 times less risky than Bragg Gaming. It trades about 0.09 of its potential returns per unit of risk. Bragg Gaming Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  355.00  in Bragg Gaming Group on October 25, 2024 and sell it today you would earn a total of  68.00  from holding Bragg Gaming Group or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Teradyne  vs.  Bragg Gaming Group

Teradyne

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Teradyne are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Teradyne reported solid returns over the last few months and may actually be approaching a breakup point.

Bragg Gaming Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bragg Gaming Group 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.

Pair Trading with Teradyne and Bragg Gaming

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

The idea behind Teradyne and Bragg Gaming Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.