As a result of the Corona Virus, we may be in for a bear market in the coming months so it's important that we not only protect our portfolio from losses but also set ourselves up for gains. Whether it's the current threat of COVID-19 or some future bear market in years to come, it's important to not only know how to survive but also how to make money when the market is volatile and heading south.
Tag archives: Correlation
Understanding the difference between correlation and cointegration is critical if you intend to pair trade stocks. Not knowing the difference is a sure fire way to mount up losses in your account.
Creating a profitable stock portfolio is not just about selecting the right stocks, it is about ensuring you understand how your positions relate to each other, how diversified your portfolio is and how exposed you are to different areas of the market. Correlation cluster charts give you the birds eye view needed to do this.
Creating a well diversified, profitable stock portfolio takes more than simply selecting stocks from different Sectors. This article discusses the benefits of correctly diversifying your stock portfolio and what it takes to do so.
Over the last couple weeks the $SPY has had a strong rally. Gold stocks on the other hand have largely done the opposite. Does this present an opportunity?
Correlation (aka: Correlation Coefficient) measures the linear relationship between two variables. In the context of trading or investing, correlation refers to the linear relationship of the historical price data of two instruments over a given time frame.