Correlation Between Basic Attention and IOTA
Can any of the company-specific risk be diversified away by investing in both Basic Attention and IOTA 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 IOTA 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 IOTA, you can compare the effects of market volatilities on Basic Attention and IOTA 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 IOTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and IOTA.
Diversification Opportunities for Basic Attention and IOTA
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Basic and IOTA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and IOTA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOTA 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 IOTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOTA has no effect on the direction of Basic Attention i.e., Basic Attention and IOTA go up and down completely randomly.
Pair Corralation between Basic Attention and IOTA
Assuming the 90 days trading horizon Basic Attention Token is expected to generate 1.11 times more return on investment than IOTA. However, Basic Attention is 1.11 times more volatile than IOTA. It trades about -0.16 of its potential returns per unit of risk. IOTA is currently generating about -0.33 per unit of risk. If you would invest 35.00 in Basic Attention Token on January 24, 2024 and sell it today you would lose (8.00) from holding Basic Attention Token or give up 22.86% 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. IOTA
Performance |
| Timeline |
| Basic Attention Token |
| IOTA |
Basic Attention and IOTA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and IOTA
The main advantage of trading using opposite Basic Attention and IOTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, IOTA 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 IOTA will offset losses from the drop in IOTA's long position.| Basic Attention vs. Solana | Basic Attention vs. XRP | Basic Attention vs. The Open Network | Basic Attention 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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