Correlation Between Basic Attention and Maker
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Maker 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 Maker 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 Maker, you can compare the effects of market volatilities on Basic Attention and Maker 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 Maker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Maker.
Diversification Opportunities for Basic Attention and Maker
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Basic and Maker is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Maker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maker 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 Maker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maker has no effect on the direction of Basic Attention i.e., Basic Attention and Maker go up and down completely randomly.
Pair Corralation between Basic Attention and Maker
Assuming the 90 days trading horizon Basic Attention is expected to generate 2.82 times less return on investment than Maker. In addition to that, Basic Attention is 1.1 times more volatile than Maker. It trades about 0.05 of its total potential returns per unit of risk. Maker is currently generating about 0.15 per unit of volatility. If you would invest 215,793 in Maker on January 25, 2024 and sell it today you would earn a total of 76,931 from holding Maker or generate 35.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Basic Attention Token vs. Maker
Performance |
Timeline |
Basic Attention Token |
Maker |
Basic Attention and Maker Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basic Attention and Maker
The main advantage of trading using opposite Basic Attention and Maker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Maker 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 Maker will offset losses from the drop in Maker's 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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