Here’s data on how Dogecoin, Shiba Inu, and other altcoins have correlated with Bitcoin over the past month.
Correlation matrix between various assets and Bitcoin
In a new post on Market Intelligence Platform X Enter the neighborhood The correlation between Bitcoin and different top currencies in the digital asset space was studied.
The relevant metric here is the “correlation coefficient,” a statistical tool used to track how well two given quantities are correlated with each other over a given period.
The 30-day version of this indicator is interesting in the context of the current discussion, meaning that it tells us the correlation between assets over the past month.
When the value of this indicator is greater than zero, related coins keep moving together. The closer the indicator is to 1, the stronger this positive correlation is.
On the other hand, an indicator value below the mark means that there was a negative correlation between assets over the past 30 days. This means that price changes in one coin are being reflected in the other coin in the opposite direction.
Of course, as long as the correlation coefficient of two quantities is exactly zero, it means that there is no correlation between the given quantities, whether positive or negative.
Now, the table below shows the 30-day correlation coefficient between Bitcoin and various altcoins, including memecoin Dogecoin (DOGE) and Shiba Inucoin (SHIB):
How closely the different assets in the sector have been moving with BTC | Source: IntoTheBlock on X
As shown above, Ethereum (ETH) and Litecoin (LTC) are the assets with the strongest correlation to Bitcoin over the past month, with indicator values of 0.94 and 0.95 respectively.
Dogecoin’s relationship with the number one cryptocurrency is also very close, as Dogecoin’s correlation coefficient was 0.9 over the past 30 days. Its cousin the Shiba Inu also has a strong relationship with this asset, although the correlation is slightly less extreme (0.82).
Overall, all altcoins on this list have a correlation of at least 0.78, which shows that Bitcoin has been the market leader. The only exception is the stablecoin Tether (USDT), which is pegged to the US dollar and therefore has no correlation to the more volatile BTC.
Generally speaking, if portfolio diversification is the goal, an investor may only choose to invest in assets that are not strongly correlated with each other. The assets on this list all have relatively strong correlations with Bitcoin, but assets with lower coefficients are still better suited for diversification than others, such as ETH.
Dogecoin Price
While the relationship between Dogecoin and Bitcoin has been strong over the past month, the meme coin does not appear to be following Bitcoin’s latest surge as its price is still trading around $0.06.
Dogecoin has been moving sideways during the last few weeks | Source: DOGEUSD on TradingView
Featured image from iStock.com, chart from TradingView.com
