Correlation Between Polygon and Basic Attention
Can any of the company-specific risk be diversified away by investing in both Polygon and Basic Attention 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 Polygon and Basic Attention into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polygon and Basic Attention Token, you can compare the effects of market volatilities on Polygon and Basic Attention 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 Polygon with a short position of Basic Attention. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygon and Basic Attention.
Diversification Opportunities for Polygon and Basic Attention
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polygon and Basic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Polygon and Basic Attention Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Attention Token and Polygon 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 Polygon are associated (or correlated) with Basic Attention. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Attention Token has no effect on the direction of Polygon i.e., Polygon and Basic Attention go up and down completely randomly.
Pair Corralation between Polygon and Basic Attention
Assuming the 90 days trading horizon Polygon is expected to under-perform the Basic Attention. In addition to that, Polygon is 1.06 times more volatile than Basic Attention Token. It trades about -0.01 of its total potential returns per unit of risk. Basic Attention Token is currently generating about 0.02 per unit of volatility. If you would invest 25.00 in Basic Attention Token on January 20, 2024 and sell it today you would lose (1.00) from holding Basic Attention Token or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polygon vs. Basic Attention Token
Performance |
| Timeline |
| Polygon |
| Basic Attention Token |
Polygon and Basic Attention Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygon and Basic Attention
The main advantage of trading using opposite Polygon and Basic Attention positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygon position performs unexpectedly, Basic Attention 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 Basic Attention will offset losses from the drop in Basic Attention's long position.The idea behind Polygon and Basic Attention Token pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |