Correlation Between Bragg Gaming and NEXON
Can any of the company-specific risk be diversified away by investing in both Bragg Gaming and NEXON 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 NEXON 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 NEXON Co, you can compare the effects of market volatilities on Bragg Gaming and NEXON 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 NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bragg Gaming and NEXON.
Diversification Opportunities for Bragg Gaming and NEXON
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bragg and NEXON is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON 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 NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and NEXON go up and down completely randomly.
Pair Corralation between Bragg Gaming and NEXON
Given the investment horizon of 90 days Bragg Gaming Group is expected to under-perform the NEXON. But the stock apears to be less risky and, when comparing its historical volatility, Bragg Gaming Group is 1.06 times less risky than NEXON. The stock trades about -0.02 of its potential returns per unit of risk. The NEXON Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,802 in NEXON Co on September 19, 2024 and sell it today you would lose (378.00) from holding NEXON Co or give up 20.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 70.45% |
Values | Daily Returns |
Bragg Gaming Group vs. NEXON Co
Performance |
Timeline |
Bragg Gaming Group |
NEXON |
Bragg Gaming and NEXON Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bragg Gaming and NEXON
The main advantage of trading using opposite Bragg Gaming and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bragg Gaming position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.Bragg Gaming vs. Global E Online | Bragg Gaming vs. Etsy Inc | Bragg Gaming vs. PDD Holdings | Bragg Gaming vs. JD Inc Adr |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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