Correlation Between Basic Attention and Lisk
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Lisk 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 Lisk 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 Lisk, you can compare the effects of market volatilities on Basic Attention and Lisk 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 Lisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Lisk.
Diversification Opportunities for Basic Attention and Lisk
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basic and Lisk is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Lisk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisk 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 Lisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisk has no effect on the direction of Basic Attention i.e., Basic Attention and Lisk go up and down completely randomly.
Pair Corralation between Basic Attention and Lisk
Assuming the 90 days trading horizon Basic Attention is expected to generate 2.59 times less return on investment than Lisk. But when comparing it to its historical volatility, Basic Attention Token is 2.26 times less risky than Lisk. It trades about 0.14 of its potential returns per unit of risk. Lisk is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Lisk on December 29, 2023 and sell it today you would earn a total of 58.00 from holding Lisk or generate 42.03% 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. Lisk
Performance |
Timeline |
Basic Attention Token |
Lisk |
Basic Attention and Lisk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basic Attention and Lisk
The main advantage of trading using opposite Basic Attention and Lisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Lisk 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 Lisk will offset losses from the drop in Lisk's long position.Basic Attention vs. Solana | Basic Attention vs. XRP | Basic Attention vs. Staked Ether | Basic Attention vs. Avalanche |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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