What is Correlation?
How closely two assets move together, from −1 to +1, measured over a window.
Correlation describes co-movement, not causation. Crypto's correlation to equities rises in stress: everything falls together when leverage unwinds.
BTC correlation and beta to the market are features the direction model uses, so a coin trading like Bitcoin is scored differently from one that does not.
Related terms
- Risk-on / risk-offMacro
Whether investors are adding or removing risk; crypto usually trades as a risk asset.
- BetaMacro
How much an asset moves when the market moves: 1.5 means 50% more than the benchmark.