Chart of the week: avocados and bitcoin are in sync

An amusing new spurious correlation has been spotted between the price of bitcoin and Mexican Hass avocados. In reality, of course, they have nothing to do with each other beyond “superficial price action”.

976_COTW

"Correlation is not causation" is a dictum well worth bearing in mind when it comes to finance: just because two variables appear to be linked it does not mean that one causes the other.

There is a correlation between Bangladeshi butter production and US stockmarket returns, but it would be unwise to base your assessment of the latter on the former. An amusing new spurious correlation is between the price of bitcoin and Mexican Hass avocados, as John Authers notes on Bloomberg.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

They have nothing to do with each other beyond "superficial price action". In fact, they are heading in different directions. The avocado market is coalescing around the Hass variety; cryptocurrencies are splitting into "ever-proliferating" new coin types.

Viewpoint

Anthony Hilton, Evening Standard

Advertisement

Recommended

Visit/519858/how-long-can-the-good-times-roll
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Visit/503514/the-charts-that-matter-tesla-hits-a-pothole
Economy

The charts that matter: Tesla hits a pothole

Electric-car group Tesla has had a rough week. John Stepek looks at what was behind it, and at the rest of the global economy’s most important charts.
16 Mar 2019
Visit/502522/the-charts-that-matter-the-tug-of-war-continues
Economy

The charts that matter: the tug of war continues

As the US Federal Reserve backs off, John Stepek looks at how quantitative tightening is affecting the global economy’s most important charts.
23 Feb 2019
Visit/501893/the-charts-that-matter-the-v-shaped-rally-stalls
Economy

The charts that matter: the V-shaped rally stalls

As the stockmarket rally peters out, John Stepek looks to the global economy’s most important charts to see where we might go from here.
9 Feb 2019

Most Popular

Visit/economy/600632/money-minute-friday-17-january-uk-weakness-likely-to-continue
Economy

Money Minute Friday 17 January: UK weakness likely to continue

Today's Money Minute previews UK retail sales figures the UK, inflation data from Europe and industrial production from the US.
17 Jan 2020
Visit/520525/currency-corner-how-high-can-the-pound-go-against-the-euro-in-2020
Currencies

Currency Corner: how high can the pound go against the euro in 2020?

In the month in which we should finally leave the European Union, Dominic Frisby takes a look at the pound vs the euro and asks just how high sterling…
13 Jan 2020
Visit/investments/property/house-prices/600638/uk-house-prices-may-be-heading-for-a-boris-bounce
House prices

UK house prices may be heading for a Boris bounce

The latest survey of estate agents and surveyors from the Royal Institution of Chartered Surveyors is "unambiguously positive" – suggesting house pric…
16 Jan 2020
Visit/investments/stocks-and-shares/share-tips/600636/class-acts-going-cheap-buy-into-europes-best
Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020