Correlation Between Basic Attention and Chainlink
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Chainlink 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 Chainlink 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 Chainlink, you can compare the effects of market volatilities on Basic Attention and Chainlink 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 Chainlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Chainlink.
Diversification Opportunities for Basic Attention and Chainlink
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Basic and Chainlink is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Chainlink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainlink 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 Chainlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainlink has no effect on the direction of Basic Attention i.e., Basic Attention and Chainlink go up and down completely randomly.
Pair Corralation between Basic Attention and Chainlink
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the Chainlink. But the crypto coin apears to be less risky and, when comparing its historical volatility, Basic Attention Token is 1.01 times less risky than Chainlink. The crypto coin trades about 0.0 of its potential returns per unit of risk. The Chainlink is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,021 in Chainlink on January 26, 2024 and sell it today you would earn a total of 416.00 from holding Chainlink or generate 40.74% 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. Chainlink
Performance |
Timeline |
Basic Attention Token |
Chainlink |
Basic Attention and Chainlink Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basic Attention and Chainlink
The main advantage of trading using opposite Basic Attention and Chainlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Chainlink 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 Chainlink will offset losses from the drop in Chainlink'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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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