Derivatives & Risk

What is correlation risk in a crypto portfolio?

Correlation risk is the danger that assets you hold move together more closely than expected, so they fall at the same time and provide less diversification than intended. In crypto, many tokens are highly correlated with Bitcoin, meaning a portfolio of ten coins can behave like one position during a sell-off. For example, an altcoin basket assumed to be diversified may drop in unison when the market turns. Correlations also shift over time. Understanding how constituents relate is part of disciplined index construction. Qatobit studies these relationships in its documented methodology.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.