relation analysis notebook

[hamidm21]

1. Data Collection

• Collect historical price data for Bitcoin and Ethereum. You can use APIs like CoinGecko, CryptoCompare, or Yahoo Finance to get this data.

2. Data Preprocessing

• Clean the data by handling missing values and outliers.
• Normalize the prices using fractional differentiation. This will make the time series stationary while maintaining as much memory as possible.

3. Exploratory Data Analysis

• Plot the time series of both Bitcoin and Ethereum prices.
• Calculate and plot the correlation between the two price series.

4. Correlation Analysis

• Calculate the Pearson correlation coefficient to measure the linear relationship between Bitcoin and Ethereum prices.
• Plot a scatter plot to visualize this relationship.
• perform cross-correlation analysis between the two to find any relations between the lags of the signals

5. Vector Autoregression (VAR) Analysis

• Fit a VAR model to the price series.
• Use the model to forecast future prices.
• Evaluate the performance of the model using appropriate metrics (like RMSE).

6. Wavelet Transform Analysis

• Apply wavelet transform to the price series to analyze the frequency characteristics over time.
• Visualize the results using a scalogram.

7. Comparison of Methods

• Compare the results of the correlation, VAR, and wavelet transform analyses.
• Point out the advantages and disadvantages of each method in terms of their ability to capture the relationship between Bitcoin and Ethereum prices.

8. Conclusion
   Summarize the findings of your analyses.
   Discuss any potential implications for trading strategies or risk management.

[soltaniali]

i have done this until the wavelet part , there is a small issue too.