Can someone explain why Microsoft has overall the strongest negative correlation with Activision/Blizzard(-0.87) on a 1 year basis. That must be related to the aquistion but I can not figure out how.
Maybe single day move on acquisition announcement - ATVI up quite a bit on 1/18, MSFT down that day. As an aside, the methodology says "We calculate the correlations between 2 securities on the daily closing values of the last 20 years. If one of the two securities has not been on the market for so long, we use all available prices to calculate the correlation." - hopefully the author means daily changes, not daily v…
Show HN: Find the 10 highest and 10 lowest correlations to any stock
101–110 of 147 posts
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#102Earlier quoted context omitted.
Huh, I didn't realise that was possible either. To be fair though, it does say 'or', not 'xor'!
In casual English “or” means “xor” most of the time.
I'm not so sure about that.. it certainly can, and in a lot of contexts it would all or almost all of the time; in other contexts it doesn't.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#103Earlier quoted context omitted.
The S&P 500 is for sure not the market. There are thousands of stocks that trade on various exchanges that are not in the S&P 500.
Reread my comment. I didn't say it was the market. I said it _basically is_ the market. See my comments about FT Wilshire and FTSE Russell. Regrettably, I shouldn't have bothered replying at all, some HN readers think beta is a fundamental measure. It is not. Many sources get this wrong for some reason. If you are looking at price movements, you are doing technical, not fundamental analysis.
It is also not _basically_ the market, either.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#104Couple of random thoughts: - Building things like this is always great. And its a fun site to poke around on. - I would not count on this approach or expect it to be reliable in terms of actually hedging. Correlation, as a measure, has lots of issues. You are boiling down a lot of complex relationships into a single number. While it is convenient for many calculations, there are many problems. For example, many asset…
TL;DR: Correlations does not imply causation. Having said that, if you can find a negative correlation AND there is a strong reason to believe that the negative correlation will hold as long as X and Y hold, then the tool could be very useful.
How would one determine what X and Y are?
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#105Earlier quoted context omitted.
Reread my comment. I didn't say it was the market. I said it _basically is_ the market. See my comments about FT Wilshire and FTSE Russell. Regrettably, I shouldn't have bothered replying at all, some HN readers think beta is a fundamental measure. It is not. Many sources get this wrong for some reason. If you are looking at price movements, you are doing technical, not fundamental analysis.
It is also not _basically_ the market, either.
Well I guess 80% of the market isn't basically the market by your definition is it and every major institution that uses the S&P 500 as a proxy for the US market is wrong, right? OK. Sure.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#106Cool. Not sure how useful it is considering what other commenters said, but is there anything like this for indices or currencies?
Also, typo: Higest -> Highest
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#107Earlier quoted context omitted.
It is also not _basically_ the market, either.
Well I guess 80% of the market isn't basically the market by your definition is it and every major institution that uses the S&P 500 as a proxy for the US market is wrong, right? OK. Sure.
Yes, 80% of the stock market isn't 100% of the stock market, that is correct...
Also 80% by some metrics, much, much smaller by others.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#108Earlier quoted context omitted.
tl;dr -- All trading strategies work, until they don't. And most people blow up their account, because their trading strategies worked for a long time.
The amount of engineers that discover finance an the incredible, flawless, never-gonna-go-wrong-strategy of being short volatility and feel great about their results for a long time before blowing up their accounts never ceases to amaze me. Speaking for a friend, of course.
Did friend forget to put loss stops when issuing orders..
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#109I 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...
Or you could bet everything at a casino and let it ride if you win.
But unlike selling stuff you don't have (shares, options etc), you won't lose more than your stake. You have $1k, you put it on red, you invest in the S&P, you buy Roubles, you buy a meme stock, you buy a TSLA call for 6 months time at $2k, you buy dogecoin, at most you will lose $1k.
You borrow 100 shares of TSLA when it's $900 and sell them, you'll get $90k now, but you might end up with TSLA jumping to $5k overnight and you have to send those shares back, that will cost you $500k, well done.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#110Earlier quoted context omitted.
The amount of engineers that discover finance an the incredible, flawless, never-gonna-go-wrong-strategy of being short volatility and feel great about their results for a long time before blowing up their accounts never ceases to amaze me. Speaking for a friend, of course.
Did friend forget to put loss stops when issuing orders..
Not sure about the friend, but it happens to the best of us. Somebody on Wall Street has my money.