| Abstract |
The research paper delves into the intricate relationship between traditional stock
market indices, specifically the NIFTY 50 and BSE SENSEX 30, and two major cryptocurrencies,
Bitcoin and Ethereum. Through comprehensive analysis spanning from March 2018 to January
2024, the study unveils nuanced insights into the correlation, volatility, and potential investment
opportunities presented by these diverse asset classes. Findings reveal a weak positive correlation
between NIFTY 50 and both Ethereum and Bitcoin, indicating slight alignment in price movements.
However, the higher volatility of cryptocurrencies, as evidenced by their beta coefficients,
underscores their riskier nature compared to traditional indices. Despite the weak correlations,
positive price movements are observed, suggesting potential investment benefits from diversification
strategies. The research emphasizes the importance of staying informed, adopting a long-term
investment perspective, and implementing risk management strategies when navigating the
complexities of both traditional and cryptocurrency markets. Ultimately, the paper offers practical
recommendations for investors seeking to optimize their portfolios and capitalize on the dynamic
interplay between traditional stock indices and cryptocurrencies in the evolving financial
landscape. |
