Stocks & Commodities V. 24:12 (58-59): Product Review: Correlation Reports: CSI Data by Jayanthi Gopalakrishnan
If you own shares of Starbucks, Inc. (SBUX), there’s a strong chance you follow that stock on a regular basis. But do you ever think of following the coffee futures? Are the two positively or negatively correlated? Chances are you may not know, but it may be worth your effort to analyze such correlations. But that would require analyzing so many related markets it might not be worth your time. Fortunately, to reduce the time spent in analyzing the interrelationships among various markets, Commodity Systems, Inc. (CSI) has developed an intermarket correlation report, which can go through as many as 250 million market pairs with the click of a button and spit out a list of those that are significantly correlated with each other.
This tool is especially useful for spread traders since it identifies low-risk trading opportunities. Since it is a visual tool, you can easily see the relationship between
two markets and also see where you can enter and exit your trades.
Once you have a username and password, you’re ready to test out all the features. The interface is simple and what you’ll see first on your browser is a small window with tabs across the top of the page (Figure 1). You can opt to analyze a single pair of markets, one market with everything else, multiple pairs of markets, or everything vs. everything.