Are Cryptos and Stock Market Indices Correlated?

 Cryptocurrencies and Stock Market Indices correlated

With both cryptocurrencies and the stock markets falling last week, one big question was how correlated are cryptocurrencies to stock market indices?  Many wondered if the tumble in the stock market (Covid19 and inflation fears) was also leading to falling cryptocurrency prices.

Trend and correlation analysis shows that the major cryptocurrencies are not highly correlated with the three major stock market indices: Dow Jones Industrial Averages, S&P 500, and the Russell 2000.

There are 2 potential reasons for the lack of correlation.  The first is that these markets/products service 2 different investors.  The second is that the highly regulated stick markets are not allowed to exhibit high volatility as the cryptocurrency markets so cryptocurrencies are allowed to have extreme price movements. 

Charts:

Correlation Matrix