Correlation Matrix is a feature that allows users to pinpoint the correlation levels of a series of crypto assets. With it, it's possible to analyze the strength of the connections between cryptocurrencies, pointing out trading opportunities and composing portfolios with different assets.
To add it to your platform, access the Tools menu > Correlation Matrix.
Select the time frame on the top left section, as shown below:
Next to the time frame, in Cryptocurrencies, there is a list of assets available for selection on the Correlation Matrix:
After selecting the cryptocurrencies, the correlation levels between them will be shown inside the Correlation Matrix’s frame.
Interpreting the Matrix’s coloring
In blue, we have a positive correlation. I.e., the more intense its color, the stronger its correlation factor will be.
On the other hand, the red coloring means the assets have an inverse (negative) correlation. Similarly to the blue coloring, its intensity will define the strength of this inverse correlation.
In addition to coloring, this tool displays the correlations in numerical form, for a more complex decision-making process.
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