Correlation Between Basic Attention and Cronos
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Cronos 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 Cronos 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 Cronos, you can compare the effects of market volatilities on Basic Attention and Cronos 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 Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Cronos.
Diversification Opportunities for Basic Attention and Cronos
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Basic and Cronos is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Cronos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos 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 Cronos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos has no effect on the direction of Basic Attention i.e., Basic Attention and Cronos go up and down completely randomly.
Pair Corralation between Basic Attention and Cronos
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the Cronos. In addition to that, Basic Attention is 1.4 times more volatile than Cronos. It trades about -0.13 of its total potential returns per unit of risk. Cronos is currently generating about -0.13 per unit of volatility. If you would invest 15.00 in Cronos on January 25, 2024 and sell it today you would lose (2.00) from holding Cronos or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Attention Token vs. Cronos
Performance |
| Timeline |
| Basic Attention Token |
| Cronos |
Basic Attention and Cronos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and Cronos
The main advantage of trading using opposite Basic Attention and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Cronos 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 Cronos will offset losses from the drop in Cronos' 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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