Correlation Between Basic Attention and Gnosis
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Gnosis 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 Gnosis 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 Gnosis, you can compare the effects of market volatilities on Basic Attention and Gnosis 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 Gnosis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Gnosis.
Diversification Opportunities for Basic Attention and Gnosis
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basic and Gnosis is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Gnosis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gnosis 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 Gnosis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gnosis has no effect on the direction of Basic Attention i.e., Basic Attention and Gnosis go up and down completely randomly.
Pair Corralation between Basic Attention and Gnosis
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the Gnosis. In addition to that, Basic Attention is 1.1 times more volatile than Gnosis. It trades about 0.0 of its total potential returns per unit of risk. Gnosis is currently generating about 0.03 per unit of volatility. If you would invest 29,126 in Gnosis on January 26, 2024 and sell it today you would earn a total of 9,259 from holding Gnosis or generate 31.79% 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. Gnosis
Performance |
Timeline |
Basic Attention Token |
Gnosis |
Basic Attention and Gnosis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basic Attention and Gnosis
The main advantage of trading using opposite Basic Attention and Gnosis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Gnosis 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 Gnosis will offset losses from the drop in Gnosis' 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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