Correlation Between Butterfly Network and FOXO Technologies

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

By analyzing existing cross correlation between Butterfly Network and FOXO Technologies, you can compare the effects of market volatilities on Butterfly Network and FOXO Technologies 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 Butterfly Network with a short position of FOXO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Butterfly Network and FOXO Technologies.

Diversification Opportunities for Butterfly Network and FOXO Technologies

0.54

Correlation Coefficient

Butterfly Network  FOXO Technologies

Very weak diversification

The 3 months correlation between Butterfly and FOXO is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Butterfly Network and FOXO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOXO Technologies and Butterfly Network 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 Butterfly Network are associated (or correlated) with FOXO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOXO Technologies has no effect on the direction of Butterfly Network i.e., Butterfly Network and FOXO Technologies go up and down completely randomly.

Pair Corralation between Butterfly Network and FOXO Technologies

Given the investment horizon of 90 days Butterfly Network is expected to generate 1.12 times more return on investment than FOXO Technologies. However, Butterfly Network is 1.12 times more volatile than FOXO Technologies. It trades about 0.16 of its potential returns per unit of risk. FOXO Technologies is currently generating about -0.29 per unit of risk. If you would invest  331.00  in Butterfly Network on October 6, 2024 and sell it today you would earn a total of  75.00  from holding Butterfly Network or generate 22.66% return on investment over 90 days.

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

Butterfly Network  vs.  FOXO Technologies

Butterfly Network

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Butterfly Network are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Butterfly Network showed solid returns over the last few months and may actually be approaching a breakup point.

FOXO Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FOXO Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, FOXO Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Butterfly Network and FOXO Technologies

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

The idea behind Butterfly Network and FOXO Technologies 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.