Correlation between two stocks? - Aussie Stock Forums

# Thread: Correlation between two stocks?

1. ## Correlation between two stocks?

How do I work out the correlation between two stocks?

And if there are any genius's out there.. can somebody explain to me how the 'time-computed' method is calculated?

Any help.. or any information on this would be greatly appreciated..

2. ## Re: Correlation between two stocks?

Purely a guess, but i'd say it would work on the % difference of the % moves of each stock each day.

For example if stock A went from \$30 to \$33 and stock B went from \$1 to \$1.10 they'd have a strong correlatoin. Obviously you need to test this over longer periods though!

4. ## Re: Correlation between two stocks?

thanks for the links. My understanding of how this works has been widened.

5. ## Re: Correlation between two stocks?

If you have the data set its just a simple function in excel

6. ## Re: Correlation between two stocks?

Which Excel function is it?

EDIT: I've found it, thanks for making me aware of that - makes life quite easy

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