Top 1000 US Stocks Correlation with SPY and GLD — Data Analysis
In this post, we look at the correlation coefficients between the top 1000 US Stocks ranked by market cap, and the S&P 500 index and Gold (via SPY and GLD tickers, respectively). While there are risk ratios such as Alpha and Beta that provide comparisons to benchmark indices, the idea here was to get the correlation coefficient across the full available dataset (in some cases over 20+ years of stock data via AlphaVantage) and have an additional metric to assess individual stocks in a portfolio so proper allocations can be made.
It’s interesting to see some of the most and least correlated stocks as the names may surprise you. For instance, IBM’s stock price actually mimicked the price movement of Gold quite closely! I included charts of the most and least correlated companies >$50B market cap below along with links to the Google Sheets to all the data.
In addition, a brief explanation of the correlation coefficient is pasted below as quick reference. Enjoy!
What is the Correlation Coefficient?
The correlation coefficient is a statistical measure that calculates the strength of the relationship between the relative movements of the two variables. A correlation of -1.0 shows a perfect negative correlation, while a correlation of 1.0 shows a perfect positive correlation. A correlation of 0.0 shows zero or no relationship between the movement of the two variables. Source: https://www.investopedia.com/terms/c/correlationcoefficient.asp
Top 1000 US Stocks Correlation with SPY
Top 1000 US Stocks Correlation with GLD
Disclaimer: Information provided for educational purposes only.
