Correlation Between ESE Entertainment and Bragg Gaming

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

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

Diversification Opportunities for ESE Entertainment and Bragg Gaming

0.78

Correlation Coefficient

ESE Entertainment  Bragg Gaming

Poor diversification

The 3 months correlation between ESE and Bragg is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ESE Entertainment 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 ESE Entertainment 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 ESE Entertainment 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 ESE Entertainment i.e., ESE Entertainment and Bragg Gaming go up and down completely randomly.

Pair Corralation between ESE Entertainment and Bragg Gaming

Assuming the 90 days horizon ESE Entertainment is expected to generate 1.53 times more return on investment than Bragg Gaming. However, ESE Entertainment is 1.53 times more volatile than Bragg Gaming Group. It trades about 0.0 of its potential returns per unit of risk. Bragg Gaming Group is currently generating about -0.1 per unit of risk. If you would invest  7.50  in ESE Entertainment on September 5, 2024 and sell it today you would lose (1.00) from holding ESE Entertainment or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ESE Entertainment  vs.  Bragg Gaming Group

ESE Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESE Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ESE Entertainment is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 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 ESE Entertainment and Bragg Gaming

The main advantage of trading using opposite ESE Entertainment and Bragg Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESE Entertainment 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 ESE Entertainment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.