I wanted to share something I've been working on in my free time - both as something to help inform your decisions but also as a means to gather feedback and constructive criticism from those of you out there with a ton more experience, insight, and technical prowess than myself ( probably most of you out there
). A the title indicates, my little mini-project is essentially a comparison of the daily returns of a custom-made index of Defi-related tokens against a benchmark index of the general cryptocurrency landscape. I make this comparison through the lens of the CAPM model by calculating beta (measure/systematic risk), alpha (it's "edge" over the market), and R-squared (relationship between portfolio and index).This is for those interested in the recent growth of decentralized finance, but more generally, for anyone who’s curiosity extends into finance, crypto, data analysis, or computer science.
Any feedback and constructive criticism is totally welcome. Feel free to make recommendations or pick this thing apart if you see something that could be better or is just plain wrong. I'm an open book and would love to get better at this so I can keep coming back with better projects and better insights to share. Keep reading, and much love!
Easier to share the link to the full analysis, please check it out!
https://www.reddit.com/r/defi/comments/mnsl4p/calculating_alpha_beta_and_correlation/