Correlation Between Bragg Gaming and VanEck Biotech

Can any of the company-specific risk be diversified away by investing in both Bragg Gaming and VanEck Biotech 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 VanEck Biotech 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 VanEck Biotech ETF, you can compare the effects of market volatilities on Bragg Gaming and VanEck Biotech 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 VanEck Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bragg Gaming and VanEck Biotech.

Diversification Opportunities for Bragg Gaming and VanEck Biotech

-0.57

Correlation Coefficient

Bragg Gaming  VanEck Biotech

Excellent diversification

The 3 months correlation between Bragg and VanEck is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and VanEck Biotech ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Biotech ETF 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 VanEck Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Biotech ETF has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and VanEck Biotech go up and down completely randomly.

Pair Corralation between Bragg Gaming and VanEck Biotech

Assuming the 90 days trading horizon Bragg Gaming Group is expected to generate 3.8 times more return on investment than VanEck Biotech. However, Bragg Gaming is 3.8 times more volatile than VanEck Biotech ETF. It trades about 0.21 of its potential returns per unit of risk. VanEck Biotech ETF is currently generating about -0.21 per unit of risk. If you would invest  720.00  in Bragg Gaming Group on January 26, 2024 and sell it today you would earn a total of  127.00  from holding Bragg Gaming Group or generate 17.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bragg Gaming Group  vs.  VanEck Biotech ETF

Bragg Gaming Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bragg Gaming Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Bragg Gaming displayed solid returns over the last few months and may actually be approaching a breakup point.

VanEck Biotech ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Biotech ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, VanEck Biotech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bragg Gaming and VanEck Biotech

The main advantage of trading using opposite Bragg Gaming and VanEck Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bragg Gaming position performs unexpectedly, VanEck Biotech 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 VanEck Biotech will offset losses from the drop in VanEck Biotech's long position.

The idea behind Bragg Gaming Group and VanEck Biotech ETF 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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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.