The stock sectors with the biggest bitcoin correlation
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 $Consumer Staples Select Sector SPDR Fund(XLP.US$
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.
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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.
NotRoss : Bitcoin is worth long-term investment! Is it too risky?