Analysis Of LeoFinance and Cardano Token (April 24 – May 24,2022)

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The recent dip of some crypto currencies has called for the need to carryout in-depth research on finding about how most tokens are related or not.

Tokens such as bitcoin, ethereum, binance and Solana has been analyzed with the Leo token to indentify the nature of relationship that exist between them.

This article will find out the relationship between Leo Token

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Photo Source - Coin market cap.com

and Cardano also known ada

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Photo Source - Fxempire.com

Using the data from coingecko and analysis with statistical package for the social sciences (SPSS) application for analysis of correlation.

In the course of this article, I shall tend to cover the following points which are, brief about correlation analysis, theories and hypothesis in correlation analysis, data extraction from coin gecko, analysis and interpretation of the relationship
between the price of Leo token and Ada.

A Brief About Correlation Analysis
Correlation is a test of relationship in statistics between variables of paired nature. Each day due to certain circumstances some token experiences bull and bear kind of chart.

The variables we are concerned about is that of Leo finance and that of Ada.
Correlation result can be grouped into the following

Positive correlation
A positive correlation indicates that the higher one price, the higher the other price. Prices of both tokens are referred to as variables.
This entails the coefficient of correlation is positive as well and tends towards a positive one axis.

Negative correlation
A negative correlation between two variables indicates that the coefficient is negative as well and tends towards a negative one. Meaning that the higher one price, the lower the other price as well,

Zero correlation
Zero correlation indicates that there is no relationship at all between the prices of both tokens in consideration and the correlation coefficient on a number line tends towards zero.
The coefficient of correlation resides on a line of -1 to 0 to +1.

Theories of Correlation Analysis
It is essential to go through the following when reading through this post for clear understanding.

The theories attached to correlation analysis are;
Hypothesis of correlation test
Hypothesis is a statement of fact concerned with a particular test for group of data. It is divided into types which are; null hypothesis and alternate hypothesis.

The null hypothesis for correlation test states that there is no relationship between the variables in consideration (no relationship between price of Leo token and Ada).

Secondly, the correlation coefficient is determined by considering the following fact.
The data below shows the price of Leo token and Ada. It was entered using the variable and data view mode of spss. We shall be making use of data from coin gecko which was rounded off to 4 decimal places for cardano token.

Having visualized the data, we shall proceed to enquiring about the nature of relationship using the scatter dot diagram.

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Taken With Desktop Computer

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Taken With Desktop Computer

In SPSS, the scatter dot diagram can be found under graph>> chartbuilder. It is as seen below.

Screenshot (58).png

Taken With Desktop Computer

From Our analysis of correlation,

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Taken With Desktop Computer

it shows a maximum positive relationship between the price of Leo token and that of Ada. We can reject the null hypothesis that there is no relationship between both prices of token.

Conclusion
The prices of Leo and Ada token has a high correlation. Investors can buy Leo tokens and that of Ada. With a significance of 0.00, it is obvious that the relationship is positive, the hypothesis is rejected.

We can say as the price of Leo token goes up, the price of Ada goes up as well. Reverse is same if the price of Leo goes down, the price of Ada will also go down.



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