Analyzing Cryptocurrency Returns and Inter-Asset Spillovers Using the DY Index

In the dynamic world of cryptocurrencies, understanding how different digital assets perform and influence each other is crucial for investors. Recent analyses have focused on examining the returns of major cryptocurrencies such as Bitcoin, Ethereum, Ripple, Binance Coin, and Tether. By exploring the Diebold and Yilmaz (DY) spillover index, researchers and investors can measure the variance spillovers or interdependencies between these assets over time.

The DY spillover index helps quantify how volatility or shocks in one cryptocurrency can affect others, providing valuable insights into market interconnectedness and risk contagion. For instance, high spillover effects suggest increased interlinkages where a price movement in Bitcoin may significantly impact Ethereum or Ripple.

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