Correlation Between Bullfrog and Warner Music
Can any of the company-specific risk be diversified away by investing in both Bullfrog and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on Bullfrog and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bullfrog and Warner Music.
Diversification Opportunities for Bullfrog and Warner Music
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bullfrog and Warner is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bullfrog AI Holdings, and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of Bullfrog i.e., Bullfrog and Warner Music go up and down completely randomly.
Pair Corralation between Bullfrog and Warner Music
Assuming the 90 days horizon Bullfrog AI Holdings, is expected to generate 9.88 times more return on investment than Warner Music. However, Bullfrog is 9.88 times more volatile than Warner Music Group. It trades about 0.12 of its potential returns per unit of risk. Warner Music Group is currently generating about 0.14 per unit of risk. If you would invest 26.00 in Bullfrog AI Holdings, on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Bullfrog AI Holdings, or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Bullfrog AI Holdings, vs. Warner Music Group
Performance |
| Timeline |
| Bullfrog AI Holdings, |
| Warner Music Group |
Bullfrog and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bullfrog and Warner Music
The main advantage of trading using opposite Bullfrog and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bullfrog position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.| Bullfrog vs. So Young International | Bullfrog vs. VSee Health, | Bullfrog vs. Weave Communications | Bullfrog vs. Kindly MD, Warrants |
| Warner Music vs. Aeye Inc | Warner Music vs. Ep Emerging Markets | Warner Music vs. ALPS Emerging Sector | Warner Music vs. First Physicians Capital |
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.
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