Correlation Overview

The Stock Rover Correlation Facility shows the correlation between all the individual holdings of the portfolios or watchlists selected on the left. In addition to portfolios and watchlists, you can add additional tickers for correlation analysis via the add quote box. You can add anything that Stock Rover can price to the correlation table. This includes stocks, indices, ETFs, mutual funds, portfolios and watchlists. The portfolios or watchlists that are selected on the left will be added as rows and columns, in addition to the stocks that comprise those portfolios or watchlists.

Correlation is a statistical relationship between asset prices. It is represented by a coefficient that measures, on a scale of -1 to 1, how likely it is that the price of two assets will move together—that is, how likely it is that they’ll both go up or that they’ll both go down. If two assets have a correlation value of 1, this means that they have perfect positive correlation—they move in the same direction and in the same proportion 100% of the time. Perfect negative correlation has a value of -1, and it would mean that the assets move in opposite directions in the same proportion 100% of the time. A correlation value of 0 means that the assets move together 50% of the time. In other words, they are equally likely to move together as they are to move in opposite directions.

Stock Rover’s correlation computation use the daily dividend adjusted price change percentage of an equity, ETF, mutual fund, portfolio or watchlist.

To learn more about correlation, be sure to check out our blog post What is Correlation and Why Does it Matter.

There is a video that demonstrates the Correlation facility in action. The video can be viewed here. Please note that this video was recorded on a slightly earlier version of Stock Rover, so there may be some minor differences between the product you experience and this video.

Correlation can be accessed under Portfolio Tools in the Start Menu.


Selecting Tickers to Correlate