- Bitcoin’s correlation to stock index S&P 500 has declined prominently.
- The decline in correlation means that the two asset classes are not moving in the same direction anymore.
- On April 16, the correlation was moderately positive at 0.53.
Bitcoin’s correlation to stock index S&P 500 has declined prominently, suggesting that the two asset classes are not moving in the same direction anymore. The correlation, measured through BTC/USD on Coinbase and S&P 500 futures, has touched a two-month low. At the moment, the correlation is 0.15 – a nearly negligible number. On April 16, the correlation was moderately positive at 0.53.
Correlation is measured and expressed as a number between +1 and -1. +1 indicates a positive correlation between two assets (meaning they always move together in the same direction). On the other hand, -1 shows a total negative correlation. Having two low-correlated or uncorrelated assets in a portfolio helps in reducing overall volatility.
Author: Rajarshi Mitra
Read more at: https://www.fxstreet.com/cryptocurrencies/news/bitcoins-correlation-to-the-sp-500-is-on-a-significant-decline-202005160146
