Correlation of the returns of selected stablecins with bitcoin and ethereum

Abstract

the phenomenon of cryptocurrencies has become one of the most controversial topics in the last few years, both among the professional public in economics and finance and among ordinary people who trust and invest in them.The main goal of the work is to find out the correlation between stablecoins that failed and did not maintain the promised stability around their peg and prominent cryptocurrencies with a large market capitalization, namely Bitcoin and Ethereum.The task is to find out the connection of stablecoins to significant cryptocurrencies.With a high correlation, these stablecoins cannot be stable if they are connected to a highly volatile asset.Price movement data of selected cryptocurrencies are used with a daily resolution from freely available portals. the correlation is calculated based on the primary return indicator and the Pearson correlation coefficient.The calculations show that the returns of Qcash and nuBits cryptocurrencies are correlated with Bitcoin and ethereum, and this correlation was not confirmed for the other studied failed stablecoins.