Correlations and ETF Trading Strategies
As I’ve mentioned a number of times, the markets over the past few months have been highly correlated. Most times markets correlate in one way or another but this correlation is dynamic, not static. These correlations tend to especially vary when you look at bonds versus the S&P for example, or oil versus the S&P.
This past weekend I had the good fortune of teaching a seminar on ETF trading to a very smart group mostly made up of professional traders. When we got to the correlation part of the seminar, one of the participants was kind enough to share his favorite site for identifying and measuring correlations.
The site is Asset Correlation and I’d suggest you spend some time on it. It does a number of things for you to understand just how correlated your trading positions are. Special thanks to Jack L. for making me and everyone at the seminar aware of this site.
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Larry Connors is CEO and Founder of TradingMarkets.com and Connors Research.