Correlation Between Basic Attention and Chiliz
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Chiliz 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 Chiliz 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 Chiliz, you can compare the effects of market volatilities on Basic Attention and Chiliz 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 Chiliz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Chiliz.
Diversification Opportunities for Basic Attention and Chiliz
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basic and Chiliz is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Chiliz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiliz 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 Chiliz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiliz has no effect on the direction of Basic Attention i.e., Basic Attention and Chiliz go up and down completely randomly.
Pair Corralation between Basic Attention and Chiliz
Assuming the 90 days trading horizon Basic Attention Token is expected to generate 0.93 times more return on investment than Chiliz. However, Basic Attention Token is 1.07 times less risky than Chiliz. It trades about 0.16 of its potential returns per unit of risk. Chiliz is currently generating about 0.08 per unit of risk. If you would invest 28.00 in Basic Attention Token on December 30, 2023 and sell it today you would earn a total of 6.00 from holding Basic Attention Token or generate 21.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Basic Attention Token vs. Chiliz
Performance |
Timeline |
Basic Attention Token |
Chiliz |
Basic Attention and Chiliz Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basic Attention and Chiliz
The main advantage of trading using opposite Basic Attention and Chiliz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Chiliz 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 Chiliz will offset losses from the drop in Chiliz'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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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