Great site! I've been playing around with it and seeing some interesting patterns.
One small typo: Highest -> Higest on the graphs
Show HN: Find the 10 highest and 10 lowest correlations to any stock
51–60 of 147 posts
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#52Earlier quoted context omitted.
That doesn't make any sense anyway. You're asking what are the highest and lowest correlations of the market against the market itself. You cannot compare the same or roughly the same basket of assets against itself.
That still makes sense. Something can be more or less correlated with the broader market. It's very useful, actually: you can use securities that tend to not be correlated with the broader market to build a portfolio with less average variance.
Yeah, I understand the concept, its just that regardless that people can graph it, doesn't mean that it widely has any tangible meaning other than being able to play with the numbers that come out of it.
It's a concept that fits nicely in the category of technical analysis, but not one that allows you to find any particular market insights.
If you took the whole tradable US securities market and said "what doesn't correlate with these price movements?" it doesn't mean anything.
If it did, I would ask you, "What explicitly do you _think_ this means?" Just because you get numbers in and out doesn't mean you're working with anything meaningful.
The only broadly meaningful concept you can get out of anti correlation with the market would be bonds because interest rates increasing push down the estimated future cash flows of publicly traded companies, affecting their valuations.
Everything else can be considered speculation.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#53How does this submission have both text and a URL? When hitting submit it's shown as either/or. Does the server not enforce it?
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#54Earlier quoted context omitted.
That doesn't make any sense anyway. You're asking what are the highest and lowest correlations of the market against the market itself. You cannot compare the same or roughly the same basket of assets against itself.
Yes, it makes sense. An asset's correlation are with the broader stock market is quantifiable. See also: https://www.investopedia.com/terms/b/beta.asp
No, it doesn't. The S&P 500 basically is the market. Any meaningful difference between it and the other US investable equities is marginally notable.
It's literally asking "How do these roughly 500 plus or minus largest stocks correlate with the largely the same basket of securities?"
If you took one company and compared it against the total US market, then you have something at least. If you take the market itself and compare it against itself, it makes no sense.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#55I can see the risk in short positions - you theoretically could lose an infinite amount (if you borrow X shares of something, sell them, but then can't find any to buy when it comes to returning them), and it's certainly possible to lose more than you put in (sell 100 short at $10 netting you $1000, price doubles overnight on new news, you have to buy $2000, losing a total of $1000 in the process. If price trippled o…
For anybody who wants maximum risk, and wants to lose money as fast as possible, and in the biggest amounts, there is always the Cryptocurrency Futures market.
A bit like Negative Chess...
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#56Earlier quoted context omitted.
Yes, it makes sense. An asset's correlation are with the broader stock market is quantifiable. See also: https://www.investopedia.com/terms/b/beta.asp
No, it doesn't. The S&P 500 basically is the market. Any meaningful difference between it and the other US investable equities is marginally notable. It's literally asking "How do these roughly 500 plus or minus largest stocks correlate with the largely the same basket of securities?" If you took one company and compared it against the total US market, then you have something at least. If you take the market itself a…
> If you took one company and compared it against the total US market, then you have something at least.
This is a common metric referred to as market beta.
> If you take the market itself and compare it against itself, it makes no sense.
S&P 500 and Russell 2000 are both broad market indices, but they perform differently. Even using the same index constituents with different weightings (e.g. equal vs cap weighted) can produce meaningfully different results. It makes plenty of sense to compare them.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#57"any stock"? First two I tried are not available.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#58Cool!
Little offtopic highjacking: does it make sense to "bootstrap" correlation among stock returns (frankly, any multidimensional time series, but since we're talking about stocks) with different time periods?
Say, for any pair of stock a and b, randomly selecting a startint point and a period (N days) and using this as a better estimator for the "true" correlation instead of using all the data points? Or something like this, not this process exactly
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#59Earlier quoted context omitted.
That still makes sense. Something can be more or less correlated with the broader market. It's very useful, actually: you can use securities that tend to not be correlated with the broader market to build a portfolio with less average variance.
Yeah, I understand the concept, its just that regardless that people can graph it, doesn't mean that it widely has any tangible meaning other than being able to play with the numbers that come out of it. It's a concept that fits nicely in the category of technical analysis, but not one that allows you to find any particular market insights. If you took the whole tradable US securities market and said "what doesn't co…
> It's a concept that fits nicely in the category of technical analysis, but not one that allows you to find any particular market insights.
It's useful for hedging risk
> The only broadly meaningful concept you can get out of anti correlation with the market would be bonds because interest rates increasing push down the estimated future cash flows of publicly traded companies, affecting their valuations.
This is wrong. Consider pair trading or long/short strategies, both of which rely on estimating correlations.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#60I’ve often wondered the same thing, good on you for actually doing it. That said, in any set of 20+ variables there will be a 10 highest/10 lowest correlating. Without a good (specific, hard to vary) explanation as to why the correlation happens, I would not use this information to gamble real money.
> Step 3: Check