Stock Correlation Analysis

📊 Understanding Stock Correlations

This tool analyzes how stocks move together during two different market conditions: normal trading days and high-volatility periods (when the primary stock moves more than 1%).

What is Correlation?

• +1.0: Perfect positive correlation - stocks move in the same direction
• 0.0: No correlation - stocks move independently
• -1.0: Perfect negative correlation - stocks move in opposite directions
• ±0.5+: Moderate to strong correlation (our minimum threshold)

Beta

Beta measures volatility relative to SPY. A stock with beta 2.0 moves 2% for every 1% SPY move.

🔄 Two Types of Analysis

1. All Days (Standard Correlation)

Analyzes all 252 trading days from the past year to calculate correlations under normal market conditions.

2. Large Moves (>1% Days Only)

Analyzes ONLY days when the searched stock moved >1% to calculate correlations during volatile periods.

📈 How to Use This Tool

Step 1: Search for a Stock

Enter a ticker symbol. Assume the stock has moved significantly and you need to identify other stocks that trade in tandem during similar events.

Step 2: Toggle Between Modes

• All Days: Correlations calculated using all trading days
• Large Moves: Correlations calculated using only >1% move days

Step 3: Interpret Results

• Correlation values: -1 to +1 scale indicating relationship strength
• Sign: Positive (same direction) or negative (opposite direction)
• Beta colors: Red (>1.5), Orange (1-1.5), Green (<1)

Step 4: Sort and Filter

• Click headers to sort
• Use search box to filter by symbol/company/sector
• Default sort: highest absolute correlation first

🎯 Trading Applications

Identifying Trading Opportunities

📋 Use Cases