Correlation Between ESE Entertainment and Bragg Gaming
Can any of the company-specific risk be diversified away by investing in both ESE Entertainment 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 ESE Entertainment and Bragg Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESE Entertainment and Bragg Gaming Group, you can compare the effects of market volatilities on ESE Entertainment 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 ESE Entertainment with a short position of Bragg Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESE Entertainment and Bragg Gaming.
Diversification Opportunities for ESE Entertainment and Bragg Gaming
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ESE and Bragg is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ESE Entertainment and Bragg Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bragg Gaming Group and ESE Entertainment 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 ESE Entertainment 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 Group has no effect on the direction of ESE Entertainment i.e., ESE Entertainment and Bragg Gaming go up and down completely randomly.
Pair Corralation between ESE Entertainment and Bragg Gaming
Assuming the 90 days horizon ESE Entertainment is expected to generate 6.61 times less return on investment than Bragg Gaming. In addition to that, ESE Entertainment is 1.73 times more volatile than Bragg Gaming Group. It trades about 0.04 of its total potential returns per unit of risk. Bragg Gaming Group is currently generating about 0.42 per unit of volatility. If you would invest 506.00 in Bragg Gaming Group on November 8, 2024 and sell it today you would earn a total of 276.00 from holding Bragg Gaming Group or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESE Entertainment vs. Bragg Gaming Group
Performance |
| Timeline |
| ESE Entertainment |
| Bragg Gaming Group |
ESE Entertainment and Bragg Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESE Entertainment and Bragg Gaming
The main advantage of trading using opposite ESE Entertainment and Bragg Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESE Entertainment 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 ESE Entertainment and Bragg Gaming Group 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. Enthusiast Gaming Holdings | Bragg Gaming vs. ESE Entertainment | Bragg Gaming vs. Braille Energy Systems |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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