Metatrader Indicator (MT4/MT5)
In the world of finance, correlation is a statistical measure of how two securities move in relation to each other. Correlations are used in advanced portfolio management. This indicator measures how different securities move in relation to a reference one, thus making portfolio management easier.
- Avoid concurrent trades in highly correlated instruments
- Find trading opportunities among highly correlated instruments
- Correlation is positive when two securities rise in price together
- Correlation is negative when one security increases and the other decreases
The correlation between two securities is measured by a correlation coefficient.
- A coefficient of zero is neutral correlation
- A coefficient of 0.3 is low positive correlation
- A coefficient over 0.8 is high positive correlation
- A coefficient of -0.3 is low negative correlation
- A coefficient over -0.8 is high negative correlation
The correlation is calculated against the native symbol of the chart, and the symbols to evaluate are entered as parameters.
When loading the expert to any chart, you will be presented with a set of options as input parameters. Don't despair if you think they are too many, because parameters are grouped into self-explanatory blocks.
- Max History Bars
- Amunt of bars to evaluate to the past upon loading.
- Correlation Period
- Amount of bars to use to calculate the correlation.
- 1st Symbol to 8th Symbol
- Enter the symbols to calculate the correlation.
- Does the indicator repaint?
- No, the indicator does not repaint.
- Can I choose period and timeframe to apply?
- Yes, you can!