Correlation Between Gravity and Bragg Gaming

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

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

Diversification Opportunities for Gravity and Bragg Gaming

0.15

Correlation Coefficient

Gravity  Bragg Gaming

Average diversification

The 3 months correlation between Gravity and Bragg is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gravity Co 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 Gravity 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 Gravity Co 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 Gravity i.e., Gravity and Bragg Gaming go up and down completely randomly.

Pair Corralation between Gravity and Bragg Gaming

Given the investment horizon of 90 days Gravity Co is expected to generate 0.73 times more return on investment than Bragg Gaming. However, Gravity Co is 1.36 times less risky than Bragg Gaming. It trades about 0.04 of its potential returns per unit of risk. Bragg Gaming Group is currently generating about 0.03 per unit of risk. If you would invest  4,750  in Gravity Co on January 25, 2024 and sell it today you would earn a total of  2,013  from holding Gravity Co or generate 42.38% return on investment over 90 days.

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

Gravity Co  vs.  Bragg Gaming Group

Gravity

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gravity Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Gravity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bragg Gaming Group

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bragg Gaming Group are ranked lower than 9 (%) 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 Gravity and Bragg Gaming

The main advantage of trading using opposite Gravity and Bragg Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gravity 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 Gravity Co 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..