Hello everyone, today we have an interesting topic. Comparing price movements of top crypto coins and top US tech company stocks. This idea has been spun from a tweet by Mr Alok Jain from @WeekendInvesting on Twitter.
So, I have done a correlation analysis between the top 5 crypto coins & the top 5 US tech stocks by Market Cap.
Crypto: BTCUSD (Bitcoin), ETHUSD (Ethereum), ADAUSD (Cardano), SOLUSD (Solana), XRPUSD (XRP)
Tech Stocks: AAPL (Apple), MSFT (Microsoft), AMZN (Amazon), GOOGL (Google/Alphabet), TSLA (Tesla)
The time period was considered is last 1 year.
Here are the results:
As we can see overall there's not much of a similarity between Crypto price movement & US Tech stocks price movement. So their price movement is not much correlated. So this theory is not quite correct, at least for the last year of data.
But as mentioned by Alok Jain, they fall at the same time, so now we just consider the correlation when crypto is falling & when US tech stocks are falling.
So for crypto, considered BTCUSD as the benchmark, so here's correlation matrix when BTCUSD is falling:
Here as well, we see there's not much correlation when BTCUSD is falling.
Now, we look at when top tech is falling, we consider Apple (AAPL) as a benchmark here. So, when AAPL is falling, here's the correlation matrix:
Here as well, we see there's not much correlation when AAPL falls. So we can safely conclude that there's no significant correlation between Top Cryptos and Top US Stocks.
Thanks for your time and reading this article. Keep supporting and sharing my stuff. Till next time, peace.!