Correlation Between NetEase and Bragg Gaming
Can any of the company-specific risk be diversified away by investing in both NetEase 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 NetEase and Bragg Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetEase and Bragg Gaming Group, you can compare the effects of market volatilities on NetEase 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 NetEase with a short position of Bragg Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetEase and Bragg Gaming.
Diversification Opportunities for NetEase and Bragg Gaming
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NetEase and Bragg is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NetEase 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 NetEase 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 NetEase 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 NetEase i.e., NetEase and Bragg Gaming go up and down completely randomly.
Pair Corralation between NetEase and Bragg Gaming
Given the investment horizon of 90 days NetEase is expected to generate 2.97 times less return on investment than Bragg Gaming. But when comparing it to its historical volatility, NetEase is 1.44 times less risky than Bragg Gaming. It trades about 0.01 of its potential returns per unit of risk. Bragg Gaming Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 459.00 in Bragg Gaming Group on March 21, 2024 and sell it today you would earn a total of 97.00 from holding Bragg Gaming Group or generate 21.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
NetEase vs. Bragg Gaming Group
Performance |
Timeline |
NetEase |
Bragg Gaming Group |
NetEase and Bragg Gaming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NetEase and Bragg Gaming
The main advantage of trading using opposite NetEase and Bragg Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetEase 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 NetEase 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. Snail Class A | Bragg Gaming vs. Playstudios | Bragg Gaming vs. GDEV Inc | Bragg Gaming vs. Doubledown Interactive Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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