ushellnullpath / dataanalysis_projects3

exploring the relationship and performance between Ethereum and S&P 500 based on their 5-year data

This project is the continuation of the analysis and exploration of the historical relationship and performance of Ethereum (ETH-USD) and the S&P 500 index (^GSPC) over a five-year period to provide valuable insights and visualizations to help better understand these two assets.

• LAST UPDATED (D/M/Y): 14/09/2023

Libraries Used:

pandas
matplotlib
seaborn

Project Conclusion: Building upon the initial 'dataAnalysis_projects2' project, which focused on the exploratory data analysis of historical data, this project presents the following conclusions:

1. Comparison of Closing Prices and Performance: The closing prices of Ethereum and the S&P 500 index have been compared and analyzed to present their performances. Moving averages have been plotted for both assets. The correlational analysis have also been presented between Ethereum and the S&P 500 index, and was calculated as follows:

   Correlation between ETH and S&P500: 0.872074

This high positive correlation suggests a strong relationship between Ethereum and the S&P 500 index.

2. Volatility Comparison: Volatility comparision have been examined on the two assets. The volatility was calculated as follows:

   Ethereum (ETH) volatility: 0.048309, S&P 500 (S&P500) volatility: 0.013114

Ethereum exhibits significantly higher volatility compared to the S&P 500 index, making it a riskier investment.

3. What If Scenario: To simulate a "what if" scenario, the returns on a $1 investment was calculated for both Ethereum and the S&P 500 index over time. The table presented in the jupyter notebook file shows that while Ethereum can provide substantial returns, it is also a riskier investment compared to the S&P 500, as the S&P 500 index has exhibited a more stable price over time.

DISCLAIMER: This information is provided solely for informational purposes and should not be construed as personal financial advice. Keep in mind that investing carries inherent risks. For investment ideas, consider visiting r/wallstreetbets and embracing the YOLO spirit!