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technical_indicators:correlation_coeffici [2023/02/06 15:50] jayanthi |
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| The Correlation Coefficient tells us the relationship between two securities. Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two securities move in opposite directions when the Correlation Coefficient is negative. The examples above show 20-day and 50-day Correlation Coefficients. Longer-term investors may use 150 or even 250 days (one year) for smoother lines that reflect longer-term relationships. | The Correlation Coefficient tells us the relationship between two securities. Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two securities move in opposite directions when the Correlation Coefficient is negative. The examples above show 20-day and 50-day Correlation Coefficients. Longer-term investors may use 150 or even 250 days (one year) for smoother lines that reflect longer-term relationships. | ||
| - | ===== Using with SharpCharts ===== | + | ===== Correlation Coefficient: How to Find ===== |
| + | ==== Using with SharpCharts ==== | ||
| The Correlation Coefficient is available in SharpCharts under "indicators." First, create a chart with the base security entered in the symbol box at the top of the chart (INTC). Second, select Correlation as an indicator in the drop-down menu. Third, enter the symbol for the other security and the timeframe in the parameters box ($SPX,10). These two are separated by a comma. The example below shows Intel in the main window with the 10-day Correlation Coefficient in the indicator window. This shows how Intel correlates to the S&P 500. Also, notice that the S&P 500 price plot (red dashed) is placed behind the Intel price plot for comparison. [[https://stockcharts.com/h-sc/ui?s=INTC&p=D&b=5&g=0&id=p82568512106|Click here]] for a live chart with the Correlation Coefficient. | The Correlation Coefficient is available in SharpCharts under "indicators." First, create a chart with the base security entered in the symbol box at the top of the chart (INTC). Second, select Correlation as an indicator in the drop-down menu. Third, enter the symbol for the other security and the timeframe in the parameters box ($SPX,10). These two are separated by a comma. The example below shows Intel in the main window with the 10-day Correlation Coefficient in the indicator window. This shows how Intel correlates to the S&P 500. Also, notice that the S&P 500 price plot (red dashed) is placed behind the Intel price plot for comparison. [[https://stockcharts.com/h-sc/ui?s=INTC&p=D&b=5&g=0&id=p82568512106|Click here]] for a live chart with the Correlation Coefficient. | ||