Use our free stock correlation calculator to build a correlation matrix for stocks, ETFs, and cryptocurrencies. Understand how your assets move together, identify diversification opportunities, and make more informed portfolio decisions with our professional-grade asset correlation calculator.
Calculating correlations...
Fetching price data and calculating correlations...
Most Correlated Pair
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The two assets with the highest correlation. High correlations mean assets move together closely.
Least Correlated Pair
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The two assets with the lowest correlation. Low correlations provide diversification benefits.
Best Diversifier
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Avg: --
The asset with the lowest average correlation to all other assets. May be most effective for diversification.
Average Correlation
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The mean correlation across all pairs. Lower values suggest better overall diversification.
Shows how correlation between the most correlated pair has changed over time.
Export to Excel
Download the full correlation analysis including the matrix, pair details, and summary metrics.
What is a Stock Correlation Calculator?
A stock correlation calculator is a financial analysis tool that measures how closely different assets move together over time. It produces a correlation matrix showing the relationship between each pair of assets in your selection.
This asset correlation calculator helps investors understand diversification - the idea that combining assets that don't move in lockstep can reduce overall portfolio risk without necessarily sacrificing returns. By identifying which assets in your portfolio have low correlations, you can build a more resilient investment strategy.
How to Read a Correlation Matrix
The correlations matrix displays values ranging from -1 to +1 for each pair of assets:
+1.0 (Perfect Positive): Assets move exactly together. When one goes up 10%, the other also goes up 10%. No diversification benefit.
+0.5 to +0.9 (High Positive): Assets tend to move in the same direction but not perfectly. Common among stocks in the same sector.
0 (No Correlation): Assets move independently. Excellent for diversification.
-0.5 to -0.9 (Negative): Assets tend to move in opposite directions. Great for hedging.
-1.0 (Perfect Negative): Assets move exactly opposite. Rare in practice.
For portfolio diversification, look for assets with correlations below 0.5. The lower the correlation, the more potential risk reduction when combined.
Why Correlations Change Over Time
Stock correlation is not static - it changes based on market conditions, economic regimes, and investor behavior. This is critical to understand:
Crisis Correlation Spike: During market crashes, correlations typically increase dramatically. Assets that seemed uncorrelated during calm markets suddenly move together as investors sell everything.
Regime Changes: Economic shifts (like rising interest rates) can change which assets move together.
Sector Rotations: Market leadership changes affect correlations between sectors and styles.
Use the rolling correlation feature to see how relationships have evolved. If correlations spiked during past crises (like 2008 or 2020), expect similar behavior in future stress events.
Practical Diversification Tips Using Correlations
Don't Double Up: If you own SPY, adding IVV (another S&P 500 ETF) provides no diversification - their correlation is ~1.0.
Mix Asset Classes: Stocks and bonds often have low or negative correlation, especially during flight-to-quality events.
Consider Geographic Diversification: International stocks may have lower correlation to US stocks, though globalization has increased co-movement.
Look Beyond Traditional Assets: Commodities, REITs, and alternative investments may offer lower correlations to traditional stock/bond portfolios.
Rebalance Regularly: Correlations change, so periodically review your portfolio's correlation structure.
Limitations and Disclaimer
Important: This correlation calculator is for educational and informational purposes only. It does not constitute investment advice. Correlations are based on historical data and may not persist in the future.
Past correlations do not guarantee future relationships.
Correlations can change suddenly, especially during market stress.
Short time periods may produce unreliable correlation estimates.
Different time periods or frequencies may show different correlations.
Always consult with a qualified financial advisor before making investment decisions.
Frequently Asked Questions
Yes, PinkLion's stock correlation calculator is completely free. Build correlation matrices for up to 10 assets, analyze ETF correlations, and export to Excel without any cost or sign-up requirement.
Yes, click the "Download CSV" button to export your correlation analysis. The file includes the full correlation matrix, pair details with overlap statistics, summary metrics, and your analysis parameters - all in a format that opens directly in Excel.
Pearson correlation measures linear relationships - it's the standard choice for most financial analysis. Spearman correlation uses ranks instead of raw values, making it more robust to outliers and extreme moves. Spearman is often preferred for volatile assets like cryptocurrencies or during periods of market stress.
Yes, ETF correlations are calculated identically to stock correlations - using the returns over your selected time period. However, be aware that ETFs tracking similar indices (like SPY, IVV, and VOO all tracking the S&P 500) will show very high correlations (~0.99) since they hold nearly identical underlying assets. For meaningful diversification analysis, compare ETFs that track different market segments.
During market stress, investor behavior becomes more uniform - many investors sell risky assets simultaneously and move to safety. This "herding" behavior causes previously uncorrelated assets to move together, increasing correlations. This phenomenon is called "correlation breakdown" and is a key risk for diversified portfolios. The rolling correlation chart can help you see this effect during past crisis periods.