Analysis of Binance And Dot Token

Analysis of tokens helps to find out how some crypto currency prices are correlated or not in the real life. I have been able to search on coin gecko in order to track the price on leo but it seems that it has not been yet released by coingecko.

This has prompted me to find out if there is a relationship that exist between other tokens because if those tokens tends to experience a rise in price, smaller projects will also gain value.

In this article, I will examine the type of relationship that exist between bnb and dot tokens with respect to consideration to the following aspect: what correlation analysis is about, understanding the basics of correlation, data collection of the prices of binance and dot token from coingecko.

What Is Correlation Analysis?
Correlation analysis is a relationship based test for variables. Statistical analysis has provided an answer to variables who estimates different values. An example of test in statistical analysis that examines relationship of variables in question is the correlation test.

Understanding the basics of correlation analysis and interpretation.
To carryout or interprete the result of an analysis that involves correlation it is very essential to understand the following basics.

Your variables most be normal.

The prices of bnb and dot isn’t just an abnormal estimate, it is one predicted from the market capitalization of both tokens. Therefore it is assumed normal but to prove this, you ought to carryout a normality test.

The result of your analysis may either fall into three categories namely:
Positive relationship
Negative relationship
Zero relationship.
As each implies will determine the direction through which they move towards. We shall consider each in detail.

Positive correlation
A relationship between variables can be termed positive when the price of bnb pumps the price of dot simultaneously pumps. We want to examine how this is possible, it is possible because there are some evidence of correlation between them. The coefficient of this relationship extends towards the positive one axis.

Negative correlation
A negative correlation is when the price of one variable pumps and the price of the other tends to reduce in price. We say there exist a kind of negative relationship. The coefficient of this relationship tends to move towards a negative one axis.

Data collection from Coin gecko
We shall proceed to collecting data from coin gecko.

Taken With Desktop Computer

The data are the price of bnb and that of dot token.

Taken With Desktop Computer

We will be working with the spss application. The data above shows the various prices of bnb and dot from the duration of May 10 to June 9, 2022 considering a 93 sample data prices from coin gecko.

We shall firstly consider the direction of relationship using a scatter dot diagram. The scatter plot is as seen below.

Taken With Desktop Computer

From the scatter plot diagram, we can see that there is somewhat positive relationship bit we shall attempt to measure the coefficient which shall warrant for correlation.

Taken With Desktop Computer

From the analysis of relationship we can find out that from the relationship test, there exist a very weak relationship coefficient between the price of bnb and dot token.

Taken With Desktop Computer

Hence with a coefficient of 0.3 we can say there exist a weak positive relationship between both tokens. We cannot really conclude that as the price of bnb goes high, the price of dot token may not likely go high as well.

Investing on bnb should be with another token not the dot if you want to make some fast profit.