Correlation Between Basic Attention and CENNZ
Can any of the company-specific risk be diversified away by investing in both Basic Attention and CENNZ 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 Basic Attention and CENNZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Attention Token and CENNZ, you can compare the effects of market volatilities on Basic Attention and CENNZ 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 Basic Attention with a short position of CENNZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and CENNZ.
Diversification Opportunities for Basic Attention and CENNZ
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Basic and CENNZ is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and CENNZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENNZ and Basic Attention 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 Basic Attention Token are associated (or correlated) with CENNZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENNZ has no effect on the direction of Basic Attention i.e., Basic Attention and CENNZ go up and down completely randomly.
Pair Corralation between Basic Attention and CENNZ
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the CENNZ. But the crypto coin apears to be less risky and, when comparing its historical volatility, Basic Attention Token is 8.87 times less risky than CENNZ. The crypto coin trades about -0.12 of its potential returns per unit of risk. The CENNZ is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3.70 in CENNZ on January 25, 2024 and sell it today you would earn a total of 4.93 from holding CENNZ or generate 133.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Basic Attention Token vs. CENNZ
Performance |
| Timeline |
| Basic Attention Token |
| CENNZ |
Basic Attention and CENNZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and CENNZ
The main advantage of trading using opposite Basic Attention and CENNZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, CENNZ 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 CENNZ will offset losses from the drop in CENNZ's long position.| Basic Attention vs. Solana | Basic Attention vs. XRP | Basic Attention vs. Staked Ether | Basic Attention vs. The Open Network |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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