Correlation Between Giga Media and Bragg Gaming

Can any of the company-specific risk be diversified away by investing in both Giga Media 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 Giga Media and Bragg Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Giga Media and Bragg Gaming Group, you can compare the effects of market volatilities on Giga Media 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 Giga Media with a short position of Bragg Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Media and Bragg Gaming.

Diversification Opportunities for Giga Media and Bragg Gaming

-0.35

Correlation Coefficient

Giga Media  Bragg Gaming

Very good diversification

The 3 months correlation between Giga and Bragg is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Giga Media 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 Giga Media 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 Giga Media 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 Giga Media i.e., Giga Media and Bragg Gaming go up and down completely randomly.

Pair Corralation between Giga Media and Bragg Gaming

Given the investment horizon of 90 days Giga Media is expected to generate 19.09 times less return on investment than Bragg Gaming. But when comparing it to its historical volatility, Giga Media is 2.24 times less risky than Bragg Gaming. It trades about 0.03 of its potential returns per unit of risk. Bragg Gaming Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  498.00  in Bragg Gaming Group on January 20, 2024 and sell it today you would earn a total of  114.00  from holding Bragg Gaming Group or generate 22.89% return on investment over 90 days.

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

Giga Media  vs.  Bragg Gaming Group

Giga Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Giga Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Bragg Gaming Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bragg Gaming Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Bragg Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Giga Media and Bragg Gaming

The main advantage of trading using opposite Giga Media and Bragg Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Media 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 Giga Media 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.