Asset Analyzer use case
Correlation analysis for diversification and overlap questions
Compare how assets moved together over the same sample so diversification decisions rest on a shared historical window.
What this view answers
- Whether two assets tended to move together over the same history.
- How diversification changed across the chosen sample.
- Which comparison sets deserve deeper portfolio modeling.
What correlation does not tell you
Correlation is sample-dependent and backward-looking. It helps frame a diversification question, but it does not by itself establish a stable future relationship or total portfolio behavior.
Use it well by checking
- The exact overlapping date range.
- Whether the sample includes unusual macro regimes.
- Whether a full portfolio backtest is the better next step.
Best companion tools
- PCA for structural exposure concentration.
- Portfolio Backtest for full allocation behavior.
- Factor Regression for explicit factor interpretation.
FAQ
- Does low historical correlation guarantee diversification later?
- No. It is evidence about the chosen sample, not a guarantee about future regimes. Correlation can shift materially across different time windows and market conditions.