Correlation Analysis Between Avax And Leo Token

One of the essential requirement for analysis of crypto is correlation based test.

A correlation test determines the level of relationship between two or more variables. The relationship is either grouped into the following categories.

• Positive relationship

• Negative relationship and

• Zero relationship

Positive relationship
A relationship is said to be positive when the increase in one variable will lead to increase in the other and vice versa. This applies to crypto currencies in the sense that as one variable is in a bullish condition, the other will also experience same and vice versa.

A variable represents price of any crypto asset

Negative relationship
A relationship is said to be negative when increase in one variable will lead to decrease in another variable. This applies to crypto in the sense that when one variable is in a bullish condition, the other will be in a bearish condition as well.

Zero relationship
When the relationship coefficient is approximately equals to zero indicates no relationship between the variables at all.
A relationship can be weak, medium or strong.

**Analysis of correlation between avax and leo assets.
**

The result of analysis shows that there is a strong relationship between the price of avax and that of leo. R = 0.918.

In a nutshell when the price of avax is in a bullish state that of leo will also experience same at similar rate too.

The rate indicates the strength of relationship.

It is also essential to have a view of what the relationship will look like using a scatter dot diagram.

From the scatter dot diagram, as the price of avax increase, it can be traceable to an increase in the price of leo.

Other images includes

Maximum and minimum prices of both assets from June4 – September 15, 2022

Data view

Variable view

Thanks for reading am sure the post meets up with @forexbrokr expectation on leofinance.

Posted Using LeoFinance ^Beta