Founders

📊 If sectors move together, the real alpha is elsewhere

Here’s the 7-day sector correlation

> L1 ↔ L2: 0.99
> AI ↔ Cross-chain: 0.98
> DeFi ↔ Derivatives: 0.99

So what does this mean?

> High correlation = prices move together. If L1 pumps, L2 likely follows.

> High correlation = high beta. If you can’t handle the volatility, don’t stack similar sectors.

Want alpha? Look at weak correlations:

• CEX ↔ SocialFi: 0.76
• DeFi ↔ DeFAI: 0.86

📌 Where's the edge?

- If L1s are already up 30%, and L2s are this correlated, you're probably late.

- But if CEXs are sleeping while SocialFi is heating up? That’s where the opportunity might be.

Correlation ≠ just price. It reflects shared liquidity, sentiment, and narrative flow

Strategy:

> Rotate early into the sectors most correlated with the current pump.
> If correlation is low, consider holding both. It acts as a hedge.

Also doubles as a roadmap for airdrop hunters🪂