Correlation Between Bullfrog and Newtopia

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

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

Diversification Opportunities for Bullfrog and Newtopia

-0.12

Correlation Coefficient

Bullfrog  Newtopia

Good diversification

The 3 months correlation between Bullfrog and Newtopia is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bullfrog AI Holdings, and Newtopia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtopia and Bullfrog 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 Bullfrog AI Holdings, are associated (or correlated) with Newtopia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtopia has no effect on the direction of Bullfrog i.e., Bullfrog and Newtopia go up and down completely randomly.

Pair Corralation between Bullfrog and Newtopia

Given the investment horizon of 90 days Bullfrog AI Holdings, is expected to under-perform the Newtopia. But the stock apears to be less risky and, when comparing its historical volatility, Bullfrog AI Holdings, is 2.56 times less risky than Newtopia. The stock trades about -0.01 of its potential returns per unit of risk. The Newtopia is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.14  in Newtopia on December 30, 2024 and sell it today you would lose (0.09) from holding Newtopia or give up 64.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Bullfrog AI Holdings,  vs.  Newtopia

Bullfrog AI Holdings,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bullfrog AI Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Newtopia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Newtopia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Newtopia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bullfrog and Newtopia

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

The idea behind Bullfrog AI Holdings, and Newtopia 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.