Ripple and Stellar Price Correlation is 88.8%. (+)
Ripple and Stellar Returns Correlation is 49.86%. (+)
Wanted to check out if there is any mispricing to profit from by simply betting on the one that diverges.
However as we can see from the chart, there is no clear indication on who is the market leader (the one that determines the overall trend) and both Stellar and Ripple take turns to lead the movements.
The extent of the movements is also unclear. Maybe we can see it on a lower timeframe? (But it shouldn't matter actually)
Conclusion: Cannot really profit from mispricing since there is no clear indication of who is the leading the trend and converges back to the norm by either coin.
Furthermore, correlations are not causations. Sometimes it may that A and B are correlated but actually its C that is causing A and B to be highly correlated.
Therefore there is a need to check on a whole range of other correlations between as many assets (other coins, especially the largest ones like bitcoin and ethereum, and prob USD)
Lastly, a correlation study is historical and as we all know in this industry that past returns are no guarantee of future success as factors causing correlations can change over time.
Ripple and Stellar Returns Correlation is 49.86%. (+)
Wanted to check out if there is any mispricing to profit from by simply betting on the one that diverges.
However as we can see from the chart, there is no clear indication on who is the market leader (the one that determines the overall trend) and both Stellar and Ripple take turns to lead the movements.
The extent of the movements is also unclear. Maybe we can see it on a lower timeframe? (But it shouldn't matter actually)
Conclusion: Cannot really profit from mispricing since there is no clear indication of who is the leading the trend and converges back to the norm by either coin.
Furthermore, correlations are not causations. Sometimes it may that A and B are correlated but actually its C that is causing A and B to be highly correlated.
Therefore there is a need to check on a whole range of other correlations between as many assets (other coins, especially the largest ones like bitcoin and ethereum, and prob USD)
Lastly, a correlation study is historical and as we all know in this industry that past returns are no guarantee of future success as factors causing correlations can change over time.
Comment:
Please zoom in till timeline shows the 19th of Mar to 7th of May for chart analysis.