Correlation Between Basic Attention and Litecoin
Can any of the company-specific risk be diversified away by investing in both Basic Attention and Litecoin 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 Litecoin 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 Litecoin, you can compare the effects of market volatilities on Basic Attention and Litecoin 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 Litecoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Litecoin.
Diversification Opportunities for Basic Attention and Litecoin
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basic and Litecoin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Litecoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litecoin 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 Litecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litecoin has no effect on the direction of Basic Attention i.e., Basic Attention and Litecoin go up and down completely randomly.
Pair Corralation between Basic Attention and Litecoin
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the Litecoin. In addition to that, Basic Attention is 1.12 times more volatile than Litecoin. It trades about -0.12 of its total potential returns per unit of risk. Litecoin is currently generating about -0.07 per unit of volatility. If you would invest 9,577 in Litecoin on January 25, 2024 and sell it today you would lose (1,095) from holding Litecoin or give up 11.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Attention Token vs. Litecoin
Performance |
| Timeline |
| Basic Attention Token |
| Litecoin |
Basic Attention and Litecoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and Litecoin
The main advantage of trading using opposite Basic Attention and Litecoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Litecoin 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 Litecoin will offset losses from the drop in Litecoin'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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |