Correlation Between Bragg Gaming and NetEase

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

Diversification Opportunities for Bragg Gaming and NetEase

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Bragg and NetEase is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and NetEase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetEase 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 NetEase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetEase has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and NetEase go up and down completely randomly.

Pair Corralation between Bragg Gaming and NetEase

Given the investment horizon of 90 days Bragg Gaming Group is expected to generate 0.79 times more return on investment than NetEase. However, Bragg Gaming Group is 1.27 times less risky than NetEase. It trades about 0.17 of its potential returns per unit of risk. NetEase is currently generating about 0.12 per unit of risk. If you would invest  327.00  in Bragg Gaming Group on September 19, 2024 and sell it today you would earn a total of  46.50  from holding Bragg Gaming Group or generate 14.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Bragg Gaming Group  vs.  NetEase

 Performance 
       Timeline  
Bragg Gaming Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
NetEase 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in NetEase are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NetEase reported solid returns over the last few months and may actually be approaching a breakup point.

Bragg Gaming and NetEase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bragg Gaming and NetEase

The main advantage of trading using opposite Bragg Gaming and NetEase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bragg Gaming position performs unexpectedly, NetEase 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 NetEase will offset losses from the drop in NetEase's long position.
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The idea behind Bragg Gaming Group and NetEase 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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