Correlation Widget

AVAILABLE IN:

Introduction

The Correlation widget allows you to analyze how closely your portfolio’s returns move in relation to major market benchmarks. It provides a statistical measure (expressed as a percentage) of the strength and direction of the relationship between your portfolio performance and selected indices.

How to Use the Widget

On the widget, you can select benchmarks from a dropdown menu.

The platform calculates and displays the correlation % between your portfolio returns and the chosen benchmark over the selected period.
Correlation values update automatically based on date, currency and bank account filters applied on the platform.

What it Shows

Displays correlation percentages (%) between your portfolio returns and selected benchmarks.
Indicates the strength and direction of the statistical relationship:
- Positive values → Portfolio tends to move in the same direction as the benchmark.
- Negative values → Portfolio tends to move in the opposite direction of the benchmark.
- Values close to 0% → Weak or no meaningful relationship.

Available Benchmarks:

You can compare your portfolio against the following benchmarks:

DOW JONES INDUSTRIAL AVERAGE
EURO STOXX 50 PR
FTSE 100 INDEX
Global Aggregate
Global High Yield
MSCI China Index
MSCI World
Russell 2000 Index
S&P 500 Index
NASDAQ 100 Stock Index

Interpreting Correlation Values

Explained Here:

Correlation Range	Interpretation	Implication for Portfolio
+70% to +100%	Very strong positive correlation	Portfolio moves almost in tandem with the benchmark. Limited diversification benefits.
+40% to +69%	Moderate positive correlation	Portfolio tends to follow benchmark trends but still allows partial diversification.
+10% to +39%	Weak positive correlation	Portfolio and benchmark share some common drivers but maintain noticeable independence.
0% to +9%	Very weak or no correlation	Portfolio is largely independent of benchmark movements. High diversification benefit.
0% to -9%	Very weak negative correlation	Portfolio has minimal inverse movement relative to benchmark. Slight diversification impact.
-10% to -39%	Weak negative correlation	Portfolio often moves opposite to benchmark. Provides some hedging effect.
-40% to -69%	Moderate negative correlation	Portfolio frequently moves in the opposite direction of benchmark. Strong hedging and diversification.
-70% to -100%	Very strong negative correlation	Portfolio consistently moves opposite to benchmark. Acts as a natural hedge, reducing risk exposure.

Use Case Scenario

You want to see how much your portfolio is influenced by global market trends. By comparing against indices such as the S&P 500 or MSCI World, you can determine:

Whether your portfolio is market-driven or more independent.
How well your diversification strategy is working.
If your portfolio could act as a hedge against specific market indices.