Do all tokens correlate/move with one another? I did a full analysis to find out.

I was curious if all coins move with BTC or between each other. So here I analyze some of the favorite reddit coins and see what the correlation for each of them are against BTC.

Why: Many reasons but 2 main ideas are that if you want to diverse your portfolio than its important to choose assets that are either anti-correlated are does not correlate much with one another. The other is if you want to provide things like LP then it might be important to look at the relationship between the two.

Method: all data were downloaded from yahoo. I only started the calculating from 2019 to present. Some coins only have data since mid 2020, in which case it is still included but obviously and previous dates were dropped.

Results.

Here are the results. The heatmap describes the correlation. The higher the correlation the redder it is. The bottom row is BTC and is ranked by highest to lowest correlation. So as you can see ETH is one the highest correlated token while DOGE is the least at .3.

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Most important is the bottom row. However you can choose any other combination by intersecting row and column.

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for those less visually incline here is table instead.

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What is interesting here is also is that month by month the correlation could change and seem to correlate even more when the markets are volatile. Here is a breakdown month by month with ETH.

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https://preview.redd.it/qer1kc5ppzm81.png?1440&format=png&auto=webp&s=c5c5255ec904ef8d6e838b2ac097aac3ecc0fdea

As you can see ETH is starting to correlate even more with BTC to a point where they are almost at 1. There are some other tokens that surprisingly fluates a lot and even dipping to anticorrelated at some point. Here are some examples.

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https://preview.redd.it/xnmz6ek2uzm81.png?838&format=png&auto=webp&s=d2625c15d0479fee53bb7711649264d9073e271e

There are just too many to print here, but you can go to my blog ( most recent) for more details for each token.

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TL:DR,

ETH is most correlated and afew like DOGE, SAND, SOL, MANA are surprisingly not as correlated. Month by month the correlation changes drastically sometime even dipping to negative correlations.

Also let me know if you are which token you are interested month by month and I can put that in the comment or you can just visit the blog.

Bye.