Correlation Analysis Tool

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📈 What Does It Do?

• Correlation Calculation: Measures the correlation between a selected asset (Asset 1) and up to four additional assets (Asset 2, Asset 3, Asset 4, Asset 5).
  
• User Inputs: Allows you to define the primary asset and up to four comparison assets, as well as the period for correlation calculations.
  
• Correlation Matrix: Displays a matrix of correlation coefficients as a text label on the chart.
  

🔍 How It Works

• Inputs: Enter the symbols for Asset 1 (main asset) and up to four other assets for comparison.
  
• Correlation Period: Specify the period over which the correlations are calculated.
  
• Calculations: Computes log returns for each asset and calculates the correlation coefficients.
  
• Display: Shows a textual correlation matrix at the top of the chart with percentage values.
  

⚙️ Features

• Customizable Assets: Input symbols for one primary asset and up to four other assets.
  
• Flexible Period: Choose the period for correlation calculation.
  
• Correlation Coefficients: Outputs correlation values for all asset pairs.
  
• Textual Correlation Matrix: Provides a correlation matrix with percentage values for quick reference.
  

🧩 How to Use

• Add the Script: Apply the script to any asset’s chart.
  
• Set Asset Symbols: Enter the symbols for Asset 1 and up to four other assets.
  
• Adjust Correlation Period: Define the period for which correlations are calculated.
  
• Review Results: Check the correlation matrix displayed on the chart for insights.
  

🚨 Limitations

• Historical Data Dependency: Correlations are based on historical data and might not reflect future market conditions.
  
• No Visual Plots Yet: This script does not include visual plots; it only provides a textual correlation matrix.
  

💡 Best Ways To Use

• Sector Comparison: Compare assets within the same sector or industry for trend analysis.
  
• Diversification Analysis: Use the correlations to understand how different assets might diversify or overlap in your portfolio.
  
• Strategic Decision Making: Utilize correlation data for making informed investment decisions and portfolio adjustments.
  

📜 Disclaimer

This script is for educational and informational purposes only. Please conduct your own research and consult with a financial advisor before making investment decisions. The author is not responsible for any losses or damages resulting from the use of this script.