Correlation Between EOSDAC and Basic Attention

Can any of the company-specific risk be diversified away by investing in both EOSDAC 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 EOSDAC and Basic Attention into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EOSDAC and Basic Attention Token, you can compare the effects of market volatilities on EOSDAC 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 EOSDAC with a short position of Basic Attention. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOSDAC and Basic Attention.

Diversification Opportunities for EOSDAC and Basic Attention

0.86

Correlation Coefficient

EOSDAC  Basic Attention

Very poor diversification

The 3 months correlation between EOSDAC and Basic is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding EOSDAC 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 EOSDAC 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 EOSDAC 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 EOSDAC i.e., EOSDAC and Basic Attention go up and down completely randomly.

Pair Corralation between EOSDAC and Basic Attention

Assuming the 90 days trading horizon EOSDAC is expected to generate 1.89 times more return on investment than Basic Attention. However, EOSDAC is 1.89 times more volatile than Basic Attention Token. It trades about -0.07 of its potential returns per unit of risk. Basic Attention Token is currently generating about -0.18 per unit of risk. If you would invest  0.03  in EOSDAC on December 30, 2024 and sell it today you would lose (0.02) from holding EOSDAC or give up 45.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

EOSDAC  vs.  Basic Attention Token

EOSDAC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOSDAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for EOSDAC investors.

Basic Attention Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days Basic Attention Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Basic Attention Token shareholders.

Pair Trading with EOSDAC and Basic Attention

The main advantage of trading using opposite EOSDAC and Basic Attention positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOSDAC 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 EOSDAC 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.