Correlation Between Basic Attention and Loopring

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Can any of the company-specific risk be diversified away by investing in both Basic Attention and Loopring 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 Loopring 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 Loopring, you can compare the effects of market volatilities on Basic Attention and Loopring 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 Loopring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Attention and Loopring.

Diversification Opportunities for Basic Attention and Loopring

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Basic and Loopring is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Basic Attention Token and Loopring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loopring 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 Loopring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loopring has no effect on the direction of Basic Attention i.e., Basic Attention and Loopring go up and down completely randomly.

Pair Corralation between Basic Attention and Loopring

Assuming the 90 days trading horizon Basic Attention is expected to generate 1.94 times less return on investment than Loopring. But when comparing it to its historical volatility, Basic Attention Token is 1.31 times less risky than Loopring. It trades about 0.14 of its potential returns per unit of risk. Loopring is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Loopring on December 29, 2023 and sell it today you would earn a total of  11.00  from holding Loopring or generate 39.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Basic Attention Token  vs.  Loopring

 Performance 
       Timeline  
Basic Attention Token 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Basic Attention Token are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Basic Attention exhibited solid returns over the last few months and may actually be approaching a breakup point.
Loopring 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Loopring are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Loopring exhibited solid returns over the last few months and may actually be approaching a breakup point.

Basic Attention and Loopring Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Basic Attention and Loopring

The main advantage of trading using opposite Basic Attention and Loopring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Attention position performs unexpectedly, Loopring 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 Loopring will offset losses from the drop in Loopring's long position.
The idea behind Basic Attention Token and Loopring 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.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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