The Token Correlations table represents the extent to which any two particular assets are linearly related in price movement over a selected period of time. Our Token Correlations table incorporates market data from our proprietary data warehouse and displays as a heatmap, with cell value annotations as a double encoding of the correlation value.
The table is divided diagonally, with all the cells on the left hand side of the diagonal divide detailing the correlations for 2022 and all the cells on the right hand side of the diagonal divide detailing the correlations for 2023 to date.
As a rule of thumb, a correlation value in excess of 0.75 shows a strong relationship between the price movements of two assets.
0.5 to 0.75 indicates a moderate relationship.
A value between 0.25 and 0.5 indicates a weak relationship.
Any value below 0.25 indicates a negligible relationship.
Understanding the degree to which asset prices move together or against each other may help traders minimize risk and maximize returns from their investment choices.