Ticker Correlation Matrix
Enter 2 to 5 tickers to generate a pairwise Beta correlation matrix.
Popular Baskets
Understanding the Beta Matrix
This tool calculates the Beta coefficient between every pair of assets in the given basket. The Beta measures how one asset tends to move given a move in relation with the other.
The assets are decoupled. Assets with Beta's in this range are often used for diversifying portfolios.
The assets are slightly coupled. Assets with positive Beta's in this range provide little value for both diversification and mean reversion trading. Assets with negative Beta's in this range are well suited for hedging portfolios.
The assets are coupled. Assets with positive Beta's in this range are ideal for mean reversion trading when the ratio of the pair stretches. However, be cautious of very high beta's (e.g., >2) which indicate high volatility assets.
Assets with negative Beta's in this range are optimally suited for strong hedging of large and risky positions.