Energy Sector and S&P 500: A Look At Pairwise Correlation by Cassandra Wang
Can you develop a trading strategy out of a correlation pattern between two assets? Here we analyze the movement of the S&P 500 index with its various sectors to find out if any correlation patterns stand out.
In my last article in the February 2017 issue of STOCKS & COMMODITIES, I looked at inter-asset correlation and how it can be used to predict the movement of the S&P 500. After receiving an overwhelming amount of comments from readers about the study, in particular its complex calculations, I began to think about pairwise correlations between the S&P 500 and each of its sectors ...