Correlation Between Bragg Gaming and ESE Entertainment
Can any of the company-specific risk be diversified away by investing in both Bragg Gaming and ESE Entertainment 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 ESE Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bragg Gaming Group and ESE Entertainment, you can compare the effects of market volatilities on Bragg Gaming and ESE Entertainment 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 ESE Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bragg Gaming and ESE Entertainment.
Diversification Opportunities for Bragg Gaming and ESE Entertainment
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bragg and ESE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and ESE Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESE Entertainment 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 Group are associated (or correlated) with ESE Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESE Entertainment has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and ESE Entertainment go up and down completely randomly.
Pair Corralation between Bragg Gaming and ESE Entertainment
Assuming the 90 days trading horizon Bragg Gaming Group is expected to under-perform the ESE Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Bragg Gaming Group is 2.61 times less risky than ESE Entertainment. The stock trades about -0.05 of its potential returns per unit of risk. The ESE Entertainment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.00 in ESE Entertainment on September 1, 2024 and sell it today you would earn a total of 0.50 from holding ESE Entertainment or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bragg Gaming Group vs. ESE Entertainment
Performance |
| Timeline |
| Bragg Gaming Group |
| ESE Entertainment |
Bragg Gaming and ESE Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bragg Gaming and ESE Entertainment
The main advantage of trading using opposite Bragg Gaming and ESE Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bragg Gaming position performs unexpectedly, ESE Entertainment 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 ESE Entertainment will offset losses from the drop in ESE Entertainment's long position.| Bragg Gaming vs. Premium Income | Bragg Gaming vs. E L Financial Corp | Bragg Gaming vs. Fairfax Financial Holdings | Bragg Gaming vs. Fairfax Fin Hld |
| ESE Entertainment vs. VerticalScope Holdings | ESE Entertainment vs. WildBrain | ESE Entertainment vs. iShares Canadian HYBrid | ESE Entertainment vs. Altagas Cum Red |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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