Correlation Between Basic Attention and Horizen
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Horizen 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 Horizen 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 Horizen, you can compare the effects of market volatilities on Basic Attention and Horizen 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 Horizen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Horizen.
Diversification Opportunities for Basic Attention and Horizen
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Basic and Horizen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Horizen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizen 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 Horizen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizen has no effect on the direction of Basic Attention i.e., Basic Attention and Horizen go up and down completely randomly.
Pair Corralation between Basic Attention and Horizen
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the Horizen. But the crypto coin apears to be less risky and, when comparing its historical volatility, Basic Attention Token is 1.21 times less risky than Horizen. The crypto coin trades about 0.0 of its potential returns per unit of risk. The Horizen is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,822 in Horizen on December 30, 2023 and sell it today you would lose (2,444) from holding Horizen or give up 63.95% 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. Horizen
Performance |
Timeline |
Basic Attention Token |
Horizen |
Basic Attention and Horizen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basic Attention and Horizen
The main advantage of trading using opposite Basic Attention and Horizen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Horizen 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 Horizen will offset losses from the drop in Horizen'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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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