Does this support all publicly listed tickers? It didn't seem to find the few I searched for.
Show HN: Find the 10 highest and 10 lowest correlations to any stock
21–30 of 147 posts
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#22Is it just me or do others see a correlation between people who short Tesla, and posting on HN about investment tools that use questionable prediction models based on historical "patterns"?
These are starting to look like perpetual motion submissions to the patent office.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#23I don't think the method is sound. You should look into finance literature on the topic, maybe something about diversification.
It's pretty notorious for not working.
With few exceptions, all stocks are correlated to the broad market.
https://en.wikipedia.org/wiki/Beta_(finance)
One explanation that would be popular right now is that the price of stocks can be calculated based on expected future cash flows and interest rates (e.g. think of what you'd pay for a bond that produces the same csh flow.) Since the interest rate is a factor in that calculation for all stocks, there's a correlation right there.
The exceptions tend to be sketchy. At one time it was thought that gold mining stocks would move against the market, but what I heard was that gold mining firms are badly run and if you like gold you should just buy gold.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#24I 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…
In principle you have the same problem if you’re selling naked put options
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#25"We calculate the correlations between 2 securities on the daily closing values of the last 20 years." It's better to correlate daily returns than daily prices, since the latter are nonstationary, and I suggest using 1 year of daily returns rather than 20 since correlations do change over time. When I worked as a financial quant no one looked at 20 year correlations to measure near-term risk.
For a retail trader, the fees are higher, affording fewer trades in a given period.
As such the holding period might be on the order of 1 year for some people, so just 1 year of daily returns might invite too much trading if you're rebalancing.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#26This is a really great idea, unfortunately also getting 504s.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#27Nitpick: you can’t lose over 100% of your investment using a put option. You can only lose the premium.
You can lose up to 100% of premium (which makes up 100% of your investment in that option) if you BOUGHT the put option. You can lose up to Strike Price minus the premium received if you SOLD the put option.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#28I 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…
In principle you have the same problem if you’re selling naked put options
I think you mean selling naked call options. If you're selling put options, you are selling someone else the right to force you to purchase shares from them at a given price. Which means that you are long the shares and also that your downside is limited by the strike price.
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#29I don't think the method is sound. You should look into finance literature on the topic, maybe something about diversification.
It's pretty notorious for not working. With few exceptions, all stocks are correlated to the broad market. https://en.wikipedia.org/wiki/Beta_(finance) One explanation that would be popular right now is that the price of stocks can be calculated based on expected future cash flows and interest rates (e.g. think of what you'd pay for a bond that produces the same csh flow.) Since the interest rate is a factor in that…
People still do pair trading though, right?
Re: Show HN: Find the 10 highest and 10 lowest correlations to any stock
#30Very cool, although index funds like S&P 500 and DJI don't seem to work. https://betagainst.fun/asset/_gspc_spy/ https://betagainst.fun/asset/_dji_dia/
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.