Correlation Between Basic Attention and CET
Can any of the company-specific risk be diversified away by investing in both Basic Attention and CET 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 CET 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 CET, you can compare the effects of market volatilities on Basic Attention and CET 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 CET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and CET.
Diversification Opportunities for Basic Attention and CET
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basic and CET is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and CET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CET 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 CET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CET has no effect on the direction of Basic Attention i.e., Basic Attention and CET go up and down completely randomly.
Pair Corralation between Basic Attention and CET
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the CET. In addition to that, Basic Attention is 1.98 times more volatile than CET. It trades about -0.16 of its total potential returns per unit of risk. CET is currently generating about 0.01 per unit of volatility. If you would invest 3.78 in CET on January 25, 2024 and sell it today you would earn a total of 0.00 from holding CET or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Attention Token vs. CET
Performance |
| Timeline |
| Basic Attention Token |
| CET |
Basic Attention and CET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and CET
The main advantage of trading using opposite Basic Attention and CET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, CET 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 CET will offset losses from the drop in CET'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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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