What correlation means for a crypto portfolio
Correlation measures how two assets' daily returns move relative to each other, on a scale from +1.00 (perfectly in sync) through 0.00 (independent) to −1.00 (perfectly opposite). In crypto, most large caps are highly positively correlated — when Bitcoin moves, the market tends to follow.
That matters because holding five coins that all correlate 0.85+ with BTC is not real diversification — it's one bet wearing five hats. A drawdown in Bitcoin drags the whole basket down together. Genuinely diversifying means finding assets whose correlation is low (or negative) over your holding period, which this matrix makes visible at a glance.
Correlation is not static — it tightens in market-wide selloffs (when "everything goes to one") and loosens in calmer, rotation-driven phases. Switch the lookback window to see how these relationships shift over 30, 60, 90, and 180 days. All values are computed from real Binance daily closes — nothing here is simulated.