Analysis Of Solana And Avax Token ($Sol vs $Avax)

Analysis of tokens will aid to identify the pattern in which crypto tokens can be arranged in order to make profits out of them.

In my previous post, I analyzed the relationship between Solana token and Litecoin with the result of having a positive relationship. The trend for investors to follow will now be:
Bitcoin>>ethereum>>binance>>litecoin>>solana in the order of positive relationship. Meaning as the price of bitcoin is on a bull side, the prices of all the tokens in the linear order will also rise hence is advisable to invest to make out for some smart profits.

In the course of this article I will redefine correlation analysis, state its theories and importance in cryptocurrency, collect data from coingecko with its analysis and interpretation.

What is correlation analysis?
Correlation analysis is a relationship based test to see the strength of how variables are related to each other. This test was invented by s statistician named Karl Pearson who used the symbol “r” to indicate strength of relationship.

However, this can also be applied in crypto as well to monitor is the price of some tokens are favorable for investment.
As an investor, you don’t just key into any project to invest.

You have to ensure you carryout some analytical survey or research for your investment of which one of such is corelational analysis applied for multiple investments.

Theories of correlation
The following are the theories of correlation which are;
Positive correlation
Negative correlation
Zero correlation

A positive correlation between the price of Solana and that Avax indicates that as Solana token experiences a rise or a bull, avax will also experience a bull price. The coefficient of this relationship tends towards positive 1 axis.

A negative correlation between the price of Solana and that of Avax indicates that as Solana experiences a bear or a fall in the price Avax will experience a bull rise and vice versa. The coefficient of this relationship tends towards a negative 1 axis.

Zero correlation between the price of Solana and Avax token indicates that there is no relationship at all between both tokens. The coefficient of this relationship tends towards 0.

The following are the importance of correlation test in cryptocurrency

-It helps to determine the behavior of crypto currencies via the data provided.

-It helps in decision making in terms of investment.

-It helps to provide adequate inference about some tokens.

We shall proceed to collection of data from coin gecko and its analysis. The data to be collected ranges from the duration of one month plus period (May 10 – June 12, 2022). This shall be done using the SPSS software.

As seen below the variables are the 6th and 7th on the spreadsheet.

To determine the direction of relationship, I will run a scatter plot check.

From the scatter plot, we can see a positive relationship but let’s check the strength of relationship running the correlation test.

From the result of our correlation test, we can conclude that there is a maximum positive relationship with a coefficient (r= 0.86)

which tends towards a positive 1 axis meaning as the price of Solana goes on a bull, the price of Axax will also experience a bull price.

Conclusion
The maximum price of Solana token for the interval of that period was $71.54 with a minimum price of $46.79. The maximum price of Avax token for that period was $32 with a minimum price of $18.69.

The trend has been updated as thus Bitcoin>>ethereum>>binance>>Litecoin>>Solana >> Avax, if you wish to make some profits while investing. As the price of bitcoin rises, the tokens linearly stated will also rise and vice versa.