Berzerk_invest

Correlation of Cryptocurrencies

BINANCE:BTCUSDT   Bitcoin / TetherUS
“Correlation statistically measures the strength of a linear relationship between two relative movements of two variables and ranges from 0 to 1.”
In general, assets with a correlation above 0.5 or below are considered to have strong positive/negative correlations. Conversely, a close-to-zero correlation indicates no linear relationship between two variables, and for the purpose of this analysis, the returns of two assets.If the returns of two assets do exhibit a positive correlation, it implies that the two assets are, to some extent, moving in the same direction, and therefore share similar risks. On the other hand, a negative correlation between the returns of two assets indicates that the two assets are moving in opposite directions, and it is thus possible to use one asset as a hedge against the other.
Based on this analysis, correlations are highest between altcoins and Bitcoin itself (~ average correlation of 0.69), indicating that most of the altcoins move in similar directions as Bitcoin , underscoring Bitcoin’s status as a bellwether for cryptoasset markets.While, generally speaking, altcoins are highly correlated with BTC , select cryptoassets exhibit materially weaker correlations both with BTC and among one another, which suggests that additional idiosyncratic factors may affect the prices and returns of these assets.
Comment: Dear followers and users of TradingView. We are glad to share our ideas and analysis with you, guys. Now we are planning to add educational materials in our channel.
We have a short request for you. Please support our channel with your LIKES and COMMENTS below this idea.
Sincerely, Berzerk Invest🔥

FREE Ideas and Signals
✅📈 https://t.me/berzerk_invest
Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.