Decline associated with ethereum could affect investors' hedging

The correlation between bitcoin and ethereum returns has been declining since mid-March. The decline in this relationship became more pronounced after the Shanghai upgrade of Ether, with a similar trend seen in September 2022 after the network's last Merge update. The weakening of the daily return 40-day correlation could continue for another two weeks, as the initial phase of Ether extraction remains in effect after the upgrade.
Analysts David Duong and Brian Cubellis say the relevance of this correlation decline for institutional investors is that it could affect quantitative strategies that rely on one asset to cross-hedge against another (or use ETH as a hedge for less liquid cottage coins). From a fundamental perspective, it supports the diversification argument for holding both BTC and ETH