Asset Correlation Analyzer
See how different assets and sectors move together — or apart — across economic cycles. Build a smarter, more diversified portfolio by understanding real correlation patterns.
Why Correlation Matters
Assets with low or negative correlations are better diversifiers. They don't move in lockstep, so when one struggles, the other might hold up — protecting your portfolio during downturns.
Correlation Analysis
Coefficient
50%
Data not available
What this means: Correlation ranges from -1 (opposite) to +1 (identical). Moderate correlation = some diversification benefit.
Performance During Each Cycle Stage
How these assets historically performed in different economic environments.
- spy
- agg
Early Recovery
Stocks lead, bonds lag
Early Expansion
Divergence widens
Late Expansion
Bonds decline, stocks hold
Early Contraction
Flight to safety
Recession
Bonds rally hard
Trough
Bonds peak first
How to Read Correlations
+1.0 (Perfect Positive)
Move identically in the same direction
Ex: SPY & QQQ — both equity indices
💡 Poor diversifiers; choose one or allocate lightly to both
0 to +0.5 (Weak Positive)
Generally move together, but not always
Ex: Stocks & Real Estate
💡 Some diversification benefit; allocate differently
-1.0 to 0 (Negative)
Move in opposite directions
Ex: Stocks & Bonds (especially in recessions)
💡 Excellent diversifiers; use to balance risk
Practical Example: The Classic 60/40 Portfolio
60% Stocks (SPY)
Growth engine. Performs well in expansions. Struggles in recessions.
⚠️ Risky alone during downturns
40% Bonds (AGG)
Stability anchor. Generates income. Often rallies when stocks fall.
✓ Negative correlation = natural hedge
In a recession: Stocks might drop 20%, but bonds might gain 10%. Your 60/40 portfolio loses roughly 8% instead of 20%. That negative correlation saved you 12 percentage points of loss — a life-changing difference over decades.
This tool is educational. Historical correlations do not guarantee future relationships. Correlations can change during market dislocations. Consult a financial advisor for personalized guidance.