Correlation Between Newtopia and Bullfrog

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

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

Diversification Opportunities for Newtopia and Bullfrog

-0.12

Correlation Coefficient

Newtopia  Bullfrog

Good diversification

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

Pair Corralation between Newtopia and Bullfrog

Assuming the 90 days horizon Newtopia is expected to generate 2.56 times more return on investment than Bullfrog. However, Newtopia is 2.56 times more volatile than Bullfrog AI Holdings,. It trades about 0.07 of its potential returns per unit of risk. Bullfrog AI Holdings, is currently generating about -0.01 per unit of risk. 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

Newtopia  vs.  Bullfrog AI Holdings,

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.

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.

Pair Trading with Newtopia and Bullfrog

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

The idea behind Newtopia and Bullfrog AI 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.