Correlation Between Consolidated Communications and BRAGG GAMING
Can any of the company-specific risk be diversified away by investing in both Consolidated Communications 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 Consolidated Communications and BRAGG GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Communications Holdings and BRAGG GAMING GRP, you can compare the effects of market volatilities on Consolidated Communications 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 Consolidated Communications with a short position of BRAGG GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and BRAGG GAMING.
Diversification Opportunities for Consolidated Communications and BRAGG GAMING
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consolidated and BRAGG is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho 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 Consolidated Communications 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 Consolidated Communications Holdings 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 Consolidated Communications i.e., Consolidated Communications and BRAGG GAMING go up and down completely randomly.
Pair Corralation between Consolidated Communications and BRAGG GAMING
Assuming the 90 days horizon Consolidated Communications is expected to generate 7.78 times less return on investment than BRAGG GAMING. But when comparing it to its historical volatility, Consolidated Communications Holdings is 9.63 times less risky than BRAGG GAMING. It trades about 0.2 of its potential returns per unit of risk. BRAGG GAMING GRP is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 310.00 in BRAGG GAMING GRP on September 21, 2024 and sell it today you would earn a total of 42.00 from holding BRAGG GAMING GRP or generate 13.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Communications Ho vs. BRAGG GAMING GRP
Performance |
| Timeline |
| Consolidated Communications |
| BRAGG GAMING GRP |
Consolidated Communications and BRAGG GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Communications and BRAGG GAMING
The main advantage of trading using opposite Consolidated Communications and BRAGG GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications 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 Consolidated Communications Holdings 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.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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