Correlation Between Bragg Gaming and GameSquare Holdings

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

Diversification Opportunities for Bragg Gaming and GameSquare Holdings

-0.22

Correlation Coefficient

Bragg Gaming  GameSquare Holdings

Very good diversification

The 3 months correlation between Bragg and GameSquare is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bragg Gaming Group and GameSquare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameSquare Holdings 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 GameSquare Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameSquare Holdings has no effect on the direction of Bragg Gaming i.e., Bragg Gaming and GameSquare Holdings go up and down completely randomly.

Pair Corralation between Bragg Gaming and GameSquare Holdings

Given the investment horizon of 90 days Bragg Gaming Group is expected to under-perform the GameSquare Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Bragg Gaming Group is 1.62 times less risky than GameSquare Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The GameSquare Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  93.00  in GameSquare Holdings on September 4, 2024 and sell it today you would lose (8.00) from holding GameSquare Holdings or give up 8.6% of portfolio value over 90 days.

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

Bragg Gaming Group  vs.  GameSquare Holdings

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GameSquare Holdings

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days GameSquare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, GameSquare Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bragg Gaming and GameSquare Holdings

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

The idea behind Bragg Gaming Group and GameSquare Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.