Features

Correlation Matrix


To choose the right assets to use in your portfolios you need to know what's the correlation between them. The correlation matrix allows you to do this in automatically.

The portfolio correlation

In statistics, a correlation is a relationship between two variables so that each value of the first corresponds to a value of the second, following a certain regularity. This relationship is evaluated with a number that varies between 1 (when there is maximum correlation) and -1 (when there is maximum inverse correlation).
Two assets with correlation 1 are such that the movement of an asset corresponds to a similar movement and in the same direction as the other. In the same way two assets with correlation -1 are such that the movement of an asset corresponds to a similar movement but in the opposite direction of the other. Two assets are said to be uncorrelated when they have a 0 correlation, in this case the movements of the two assets are independent of each other.
The correlation matrix is composed of a grid in which for each pair of assets the correlation is shown in numeric format, and a graph showing a point for each pair, distributed between 1 and -1.

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