Correlation Between Bragg Gaming and Converge Technology

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

Diversification Opportunities for Bragg Gaming and Converge Technology

0.62

Correlation Coefficient

Bragg Gaming  Converge Technology

Poor diversification

The 3 months correlation between Bragg and Converge is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology 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 Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and Converge Technology go up and down completely randomly.

Pair Corralation between Bragg Gaming and Converge Technology

Assuming the 90 days trading horizon Bragg Gaming Group is expected to under-perform the Converge Technology. In addition to that, Bragg Gaming is 1.24 times more volatile than Converge Technology Solutions. It trades about -0.06 of its total potential returns per unit of risk. Converge Technology Solutions is currently generating about -0.07 per unit of volatility. If you would invest  425.00  in Converge Technology Solutions on September 16, 2024 and sell it today you would lose (88.00) from holding Converge Technology Solutions or give up 20.71% of portfolio value over 90 days.

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

Bragg Gaming Group  vs.  Converge Technology Solutions

Bragg Gaming Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bragg Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Converge Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Converge Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bragg Gaming and Converge Technology

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

The idea behind Bragg Gaming Group and Converge Technology Solutions 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.