How does the correlation coefficient of stocks affect the performance of digital currencies?

1 answers

• ankitmishraNov 16, 2023 · 2 years ago
  At BYDFi, we have observed that the correlation coefficient of stocks does have an impact on the performance of digital currencies. When the correlation coefficient is high, it indicates a strong relationship between the two asset classes. This means that when stocks perform well, digital currencies are also likely to perform well, and vice versa. However, it's important to note that correlation does not guarantee a direct relationship between the two. Other factors such as market conditions and investor sentiment also play a significant role. Therefore, it's crucial for investors to conduct thorough research and analysis before making investment decisions in digital currencies.
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