Correlation Between Basic Attention and MCO
Can any of the company-specific risk be diversified away by investing in both Basic Attention and MCO 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 MCO 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 MCO, you can compare the effects of market volatilities on Basic Attention and MCO 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 MCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and MCO.
Diversification Opportunities for Basic Attention and MCO
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Basic and MCO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and MCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCO 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 MCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCO has no effect on the direction of Basic Attention i.e., Basic Attention and MCO go up and down completely randomly.
Pair Corralation between Basic Attention and MCO
Assuming the 90 days trading horizon Basic Attention Token is expected to under-perform the MCO. But the crypto coin apears to be less risky and, when comparing its historical volatility, Basic Attention Token is 35.51 times less risky than MCO. The crypto coin trades about -0.16 of its potential returns per unit of risk. The MCO is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 85.00 in MCO on January 24, 2024 and sell it today you would earn a total of 1,240 from holding MCO or generate 1458.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Attention Token vs. MCO
Performance |
| Timeline |
| Basic Attention Token |
| MCO |
Basic Attention and MCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and MCO
The main advantage of trading using opposite Basic Attention and MCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, MCO 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 MCO will offset losses from the drop in MCO'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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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