Ethereum Was The 'Most Relevant Benchmark' for Crypto in 2019 - Cryptonews
According to them, ETH displayed the “highest median correlation” with other digital assets over the course of last year, with an average correlation coefficient of 0.69. That compares to a correlation coefficient of 0.31 for cosmos (ATOM), which was the least correlated digital asset for the year, followed by chainlink (LINK) and tezos (XTZ).
Comparison of quarterly average correlation coefficients for the five highest correlating assets Source: Binance Research Further, the report also explained how this insight may be used by traders and investors to achieve their diversification goals: “If the returns of two assets do exhibit a positive correlation, it implies that these two assets tend to move 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 move in opposite directions, and it is thus possible to use one asset as a hedge against the other,” the report said.
