Correlation Between Basic Attention and MONA
Can any of the company-specific risk be diversified away by investing in both Basic Attention and MONA 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 MONA 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 MONA, you can compare the effects of market volatilities on Basic Attention and MONA 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 MONA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and MONA.
Diversification Opportunities for Basic Attention and MONA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basic and MONA is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and MONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONA 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 MONA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONA has no effect on the direction of Basic Attention i.e., Basic Attention and MONA go up and down completely randomly.
Pair Corralation between Basic Attention and MONA
Assuming the 90 days trading horizon Basic Attention Token is expected to generate 1.65 times more return on investment than MONA. However, Basic Attention is 1.65 times more volatile than MONA. It trades about -0.1 of its potential returns per unit of risk. MONA is currently generating about -0.2 per unit of risk. If you would invest 34.00 in Basic Attention Token on January 26, 2024 and sell it today you would lose (6.00) from holding Basic Attention Token or give up 17.65% 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. MONA
Performance |
| Timeline |
| Basic Attention Token |
| MONA |
Basic Attention and MONA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Attention and MONA
The main advantage of trading using opposite Basic Attention and MONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, MONA 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 MONA will offset losses from the drop in MONA'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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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