Correlation and Regression Analysis of the Relation between Ethereum Price and Both Its Volume and Bitcoin Price

Abstract

This article deals with the theory and practical analysis of the relationship between bitcoin and ethereum cryptocurrencies. The existing developments on this issue are investigated by generalizing the literature on the basic characteristics and relationship of bitcoin and ethereum prices. Based on the problems and existing research on the topic, the analysis of the relationship between ethereum and bitcoin prices is defined as the goal of the article. A mathematical model of the cryptocurrency relationship analysis is presented, which helps to establish that the relationship is quite close. The main result is the conclusion that a connection exists between the prices of bitcoin and ethereum, and this connection can be used for diversification and risk insurance when trading on the cryptocurrency exchange.

The purpose of this article is to identify a tool that can describe the relationship between the price of ethereum and both its volume and the price of bitcoin and can predict their changes over time. This article analyzes the price of ethereum as dependent on the price of bitcoin.

TOPICS: Currency, Real assets/alternative investments/private equity, performance-measurement, statistical methods, portfolio construction

Key Findings

• • The relationship between the price of ethereum and its volume and the price of bitcoin, as well as the ability to predict their change over time is analyzed.

• • The revealed multiple regression equation can be used to create operational analytical programs capable of real-time forecasting the price movement of ethereum.