Correlation Between Basic Attention and Gatechain Token
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Gatechain Token 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 Gatechain Token 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 Gatechain Token, you can compare the effects of market volatilities on Basic Attention and Gatechain Token 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 Gatechain Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Gatechain Token.
Diversification Opportunities for Basic Attention and Gatechain Token
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basic and Gatechain is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Gatechain Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatechain Token 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 Gatechain Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatechain Token has no effect on the direction of Basic Attention i.e., Basic Attention and Gatechain Token go up and down completely randomly.
Pair Corralation between Basic Attention and Gatechain Token
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the Gatechain Token. In addition to that, Basic Attention is 1.14 times more volatile than Gatechain Token. It trades about -0.16 of its total potential returns per unit of risk. Gatechain Token is currently generating about -0.11 per unit of volatility. If you would invest 869.00 in Gatechain Token on January 25, 2024 and sell it today you would lose (129.00) from holding Gatechain Token or give up 14.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Attention Token vs. Gatechain Token
Performance |
| Timeline |
| Basic Attention Token |
| Gatechain Token |
Basic Attention and Gatechain Token Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and Gatechain Token
The main advantage of trading using opposite Basic Attention and Gatechain Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Gatechain Token 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 Gatechain Token will offset losses from the drop in Gatechain Token's long position.| Basic Attention vs. Solana | Basic Attention vs. XRP | Basic Attention vs. The Open Network | Basic Attention vs. Staked Ether |
| Gatechain Token vs. Solana | Gatechain Token vs. XRP | Gatechain Token vs. The Open Network | Gatechain Token vs. Staked Ether |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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