Correlation Between NEXON and BRAGG GAMING
Can any of the company-specific risk be diversified away by investing in both NEXON 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 NEXON and BRAGG GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXON Co and BRAGG GAMING GRP, you can compare the effects of market volatilities on NEXON 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 NEXON with a short position of BRAGG GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXON and BRAGG GAMING.
Diversification Opportunities for NEXON and BRAGG GAMING
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NEXON and BRAGG is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding NEXON Co and BRAGG GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAGG GAMING GRP and NEXON 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 NEXON Co 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 GRP has no effect on the direction of NEXON i.e., NEXON and BRAGG GAMING go up and down completely randomly.
Pair Corralation between NEXON and BRAGG GAMING
Assuming the 90 days horizon NEXON Co is expected to generate 0.71 times more return on investment than BRAGG GAMING. However, NEXON Co is 1.4 times less risky than BRAGG GAMING. It trades about -0.09 of its potential returns per unit of risk. BRAGG GAMING GRP is currently generating about -0.1 per unit of risk. If you would invest 1,730 in NEXON Co on September 26, 2024 and sell it today you would lose (330.00) from holding NEXON Co or give up 19.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXON Co vs. BRAGG GAMING GRP
Performance |
| Timeline |
| NEXON |
| BRAGG GAMING GRP |
NEXON and BRAGG GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXON and BRAGG GAMING
The main advantage of trading using opposite NEXON and BRAGG GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXON 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 NEXON Co and BRAGG GAMING GRP 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.| BRAGG GAMING vs. Nintendo Co | BRAGG GAMING vs. Sea Limited | BRAGG GAMING vs. Electronic Arts | BRAGG GAMING vs. NEXON Co |
Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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