Taklimakan has launched the TN Crypto 100 Index, a comprehensive analytics tool designed for financial services, specifically the crypto space. As expected, the index features the 100 top-rated digital currencies with regard to the current market capitalization value. The primary reason behind the creation of this index is to track the performance of various digital assets within the crypto industry. Essentially, the TN 100 index will serve as a reference point through which investors can monitor the prevailing trends in the crypto space.
The TN 100 Index will be used to calculate an alpha measurement, volatility (beta measurement) and a market return parameter. The market return parameter is arrived at by analyzing the performance of specific digital currencies listed on the index. Therefore, it enables traders to calculate analytical values.
On the other hand, the volatility measurement is a statistical evaluation of the dispersion of returns for each particular virtual currency. It is derived by calculating the square root of the variance of returns. Thus, the lower the volatility, the more appealing a digital currency is to prospective investors.
About Taklimakan: Calculating Alpha Measurements
The alpha measurement is used to analyze the relative performance of a digital currency in the market when compared to the index’s benchmark. Fundamentally, it shows whether a digital asset is either over performing or underwhelming with respect to the prevailing market situation. In this regard, a positive alpha implies that an asset has outperformed the index, while a negative alpha indicates that a digital currency is underachieving.
On its part, the volatility (or beta) measurement assesses the situational risk of trading in a particular digital currency. This value is arrived at using regression analysis, by dividing the covariance of a digital currency’s returns and the returns of the TN Crypto 100 index by the variance of the index’s returns over a period of sixty days.
Notably, the regression analysis gives more emphasis to recent days, meaning that they have more impact than earlier dates. The TN Crypto 1000 returns the mean market volatility, and the beta measurement returns the volatility of a specific virtual currency as compared to the market average. Hence, a beta measurement of 1 implies that the digital asset is in line with the market, and a greater value shows that the asset more volatile is comparison to the market average.
By providing access to alpha and beta indicators, the TN Crypto 100 Index enables investors to evaluate the performance trend as well as the stability of specific digital currencies. Additionally, Taklimakan is working towards the development of an educational program that will teach investors how to use the index in practical real-life situations. This is because many hobbyists often find such technical solutions to be intimidating.