Correlation Between BRAGG GAMING and China Communications
Can any of the company-specific risk be diversified away by investing in both BRAGG GAMING and China Communications 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 China Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRAGG GAMING GRP and China Communications Services, you can compare the effects of market volatilities on BRAGG GAMING and China Communications 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 China Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRAGG GAMING and China Communications.
Diversification Opportunities for BRAGG GAMING and China Communications
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BRAGG and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BRAGG GAMING GRP and China Communications Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Communications 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 GRP are associated (or correlated) with China Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Communications has no effect on the direction of BRAGG GAMING i.e., BRAGG GAMING and China Communications go up and down completely randomly.
Pair Corralation between BRAGG GAMING and China Communications
Assuming the 90 days horizon BRAGG GAMING GRP is expected to under-perform the China Communications. But the stock apears to be less risky and, when comparing its historical volatility, BRAGG GAMING GRP is 1.37 times less risky than China Communications. The stock trades about -0.25 of its potential returns per unit of risk. The China Communications Services is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 54.00 in China Communications Services on December 9, 2024 and sell it today you would earn a total of 4.00 from holding China Communications Services or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRAGG GAMING GRP vs. China Communications Services
Performance |
| Timeline |
| BRAGG GAMING GRP |
| China Communications |
BRAGG GAMING and China Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRAGG GAMING and China Communications
The main advantage of trading using opposite BRAGG GAMING and China Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRAGG GAMING position performs unexpectedly, China Communications 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 China Communications will offset losses from the drop in China Communications' long position.| BRAGG GAMING vs. Perseus Mining Limited | BRAGG GAMING vs. Corporate Office Properties | BRAGG GAMING vs. GOLDQUEST MINING | BRAGG GAMING vs. CVS Health |
| China Communications vs. Southwest Airlines Co | China Communications vs. SINGAPORE AIRLINES | China Communications vs. SOUTHWEST AIRLINES | China Communications vs. Aegean Airlines SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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