When bitcoin does well, software stocks do well. But so do tobacco stocks.
Morgan Stanley's cryptocurrency strategy team notes that when comparing
$Bitcoin(BTC.CC)$ to other asset classes, it has positive correlations to equities, with indexes rising along with the coin.
The
$SPDR S&P 500 ETF(SPY.US)$ has the closest six-month correlation with bitcoin at just above 0.3, followed by the
$Nasdaq Composite Index(.IXIC.US)$, right above 0.25.
It has negative correlations with the
$USD(USDindex.FX)$, around -0.4, gold
$SPDR Gold ETF(GLD.US)$, around -0.6, and the
$U.S. 10-Year Treasury Notes Yield(US10Y.BD)$ around -0.9.
"Below the (equity) index level, the correlations vary widely across sectors," David Adelman, Morgan Stanley director of equities strategy for the Americas writes in a note.
The top 10 most correlated subsectors are:
1. Software & Services
$Spdr Series Trust S&P Computer Software Etf(XSW.US)$2. Food, Beverage
$Invesco Food & Beverage ETF(PBJ.US)$ and Tobacco
3. Materials
$Materials Select Sector SPDR ETF(XLB.US)$4. Media & Entertainment
$Ishares Evolved U.S. Media And Entertainment Etf(IEME.US)$5. Commercial & Professional Services
6. Healthcare Equipment & Services
$Spdr S&P Health Care Equipment(XHE.US)$7. Automobiles & Components
$Nasdaq Global Auto Index First Trust(CARZ.US)$8. Diversified Financials
$Financial Select Sector SPDR Fund(XLF.US)$9. Insurance
$Ishares Trust U.S. Insurance Etf(IAK.US)$10. Household & Personal Products
$Consumer Staples Select Sector SPDR Fund(XLP.US)$Bitcoin finished last week up more than 5%, while the S&P dropped 0.3%, snapping a five-week winning streak.
William Paul : Bitcoin is basically a play against modern monetary theory
fly up high : Absolutely crazy. Proof once again that facts can be stranger than fiction. And yet another reminder that correlation does not imply cause and effect.
Indicator analyst : I wish people stop comparing bitcoin or any cryptocurrencies to any asset class. To me, it’s like comparing a unicorn to a horse race.
Drdrdoky : Not sure what week. Last week vets day to Friday 68 to 64k.
UANM5SC6Ea : So basically BTC is a relatively uncorrelated/asymmetric asset as we already knew.
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