Horizon-dependent

What does Horizon-dependent mean?

Horizon-dependent describes a relationship or behaviour that changes depending on the time period being analysed. This is often used when looking at metrics like correlation or beta between assets.

For example, two assets may behave differently over short-term periods compared to longer-term trends.

How is Horizon-dependent used?

The concept is used to compare how relationships vary across different timeframes.

It helps with:

• Analysing short-term vs long-term behaviour
• Understanding whether patterns are consistent over time
• Adjusting analysis based on the chosen timeframe (e.g. daily, monthly, yearly)

What are common examples of Horizon-dependent behaviour?

Examples include:

• Correlation between assets changing across timeframes
• Volatility appearing higher in short-term data but smoother over longer periods
• Trends that are visible over months but not on a daily basis

This shows that results can differ depending on how the data is measured.

How does Horizon-dependent apply to crypto?

In crypto, many relationships are horizon-dependent due to market structure and volatility.

Examples include:

• Bitcoin and altcoins showing different correlation patterns over short vs long periods
• Price movements appearing more volatile on shorter timeframes
• Market trends that become clearer when viewed over longer horizons

Why is Horizon-dependent important?

Horizon-dependent analysis helps explain why different conclusions can be reached from the same data. It ensures that results are interpreted within the correct timeframe when analysing markets, including crypto.