Correlation Between Basic Attention and Binance Coin
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Binance Coin 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 Binance Coin 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 Binance Coin, you can compare the effects of market volatilities on Basic Attention and Binance Coin 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 Binance Coin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Binance Coin.
Diversification Opportunities for Basic Attention and Binance Coin
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basic and Binance is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Binance Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binance Coin 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 Binance Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binance Coin has no effect on the direction of Basic Attention i.e., Basic Attention and Binance Coin go up and down completely randomly.
Pair Corralation between Basic Attention and Binance Coin
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the Binance Coin. In addition to that, Basic Attention is 2.01 times more volatile than Binance Coin. It trades about -0.11 of its total potential returns per unit of risk. Binance Coin is currently generating about 0.01 per unit of volatility. If you would invest 55,368 in Binance Coin on January 20, 2024 and sell it today you would lose (358.00) from holding Binance Coin or give up 0.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
Basic Attention Token vs. Binance Coin
Performance |
Timeline |
Basic Attention Token |
Binance Coin |
Basic Attention and Binance Coin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Basic Attention and Binance Coin
The main advantage of trading using opposite Basic Attention and Binance Coin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Binance Coin 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 Binance Coin will offset losses from the drop in Binance Coin's long position.Basic Attention vs. Solana | Basic Attention vs. XRP | Basic Attention vs. The Open Network | Basic Attention vs. Staked Ether |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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