A look at the Bitcoin [BTC] correlation score and its essence for investors

There is a growing convergence between Bitcoin [BTC] and traditional stocks. Bitcoin’s correlation with DXY is, however, still at a divergence. After dropping for months beforehand, the price of Bitcoin [BTC] has been increasing since the beginning of the year. Despite the significant price increase, it is yet to recover to the level that saw […]

to another asset or basket of assets, the correlation score can be used to gauge the degree to which the two prices move in tandem.

If the correlation score is -1, then the values of the two assets are perfectly uncorrelated with one another; if it’s zero, then there is no association between the prices of the two assets; and if it’s 1, then there is a perfect positive correlation between the prices of the two assets . However, it’s important to remember that correlation ratings can shift over time. This highlights the need for constant asset correlation monitoring and subsequent investing strategy adjustments.data shows that following the Covid-19 epidemic, Bitcoin’s correlation score changed significantly. Some types of investments were chosen for this study so that we could get a feel for the correlation score that is now available.

Despite this, there has been zero correlation between the DXY and Euro futures, either before or after the outbreak. High correlation is denoted by deep red, high anti-correlation is denoted by deep blue, and no correlation is denoted by yellow.The SP500, Nasdaq, and Bitcoin Index as of this writing revealed that they were all moving in separate directions.

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