Correlation Data between 2 random US stocks

F

FrCrilly

Registered User
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Hi All,

I'm researching a stock market investment strategy in which risk management will be the top priority. I looking for a facility on the web that tells me the correlation between 2 random and seperate US stocks, ie how they have moved in tandem with each other, against each other or neither over a previous specified period of time.

Does anyone have experience of such a facility (or similar) on the web? If yes, is the data reliable and can it be obtained cheaply/freely? Are there any other pointers in relation to using it?

Any help with the above will be greatly appreciated. Thanks In Advance for all responses
 
Many stock sites (e.g. Google Finance, NASDAQ, NYSE etc.) allow you to chart two or more stocks/indices for comparison. Remember that correlation and causality are not necessarily the same though!
 
Presumably you will be using the money that was "just resting in your account" to test this hypothesis???
 
The Yahoo! charts show the relative percentage change of two (or more) stocks against each other but not correlations. You can download historical price data from Yahoo!, and can calculate correlations in XL using, e.g. the CORREL function.
When you’ve calculated the correlation coefficient you can then calculate the efficient frontier, which is what you need to know if you are investing.
If you do a search on the Internet for ‘Markowitz’ and ‘correlation’ or ‘efficient frontier’ you should be able to find XL spreadsheets that can calculate the efficient frontier between two assets. I’ve never found (a free) one that can handle more than two variables; anything more than that and you’re into linear programming.
 
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