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Correlation

Hersheys CoCo World"CoCo World" helps to answer the following question... Is this stock moving alone or with other markets? No stock is an island, so it's important to see what everyone else is doing! With limited screen real estate, I want to see as much info as possible as I'm evaluating US equities and deciding to pull the trigger to buy and sell. My "CoCo World" indicator packs a lot of info into a small space! I got the idea when looking at some Correlation Coefficient studies, hence the name "CoCo". First I build three series to compare percent price changes... #1 = Stock = Your chart symbol #2 = US Index = SPY #3 = World Index = This is an index of the top 10 world economies using the iShares country indexes. They are weighted by GDP and then the percent price change from last to current tick are summed together. For example, the US makes up 37%, China 22%, etc. Why use iShares instead of the world markets directly, like the China SSE or Japan Nikkei? The iShares indexes are traded live at the same time as US markets. Measuring money flow in and out of these funds should naturally reflect broad sentiment about each country. There are Green/Red bars in the indicator space under your chart, also Green/Red background colors. Green Bar = Stock, US and World are UP, Stock up more than US, US up more than World. Red Bar = Stock, US and World are DOWN, Stock down more than US, US down more than World. Green Background = positive 7 period combined average direction of Symbol/US/World Red Background = negative 7 period combined average direction of Symbol/US/World This indicator works great all the way down to 1-minute bars... watch for green bars at the end of down-trends and red bars signalling the end of up-trends. Use caution if entering long trades while the background is red, this means the markets are against you! Use "CoCo World" with your other favorite indicators to get a more complete picture. Knowledge is POWER! Good trading, and follow me for updates! Brian Hershey
Pine Script® indicator
by bnh
4
Hersheys CoCoThis is my variation of the Correlation Coefficient and I call it "Hershey's CoCo". The indicator identifies very specific Stock, Sector and Market pressures on whatever symbol you are evaluating. If interested, follow me and send me requests to evaluate your stock or sector as I refine this tool. *********************************************** Price movement does not happen in isolation. Stocks are held by various "containers" that can be traded independently and can affect the price of each stock. The most important of those containers are Sector and Market, while others include Industry, MarketCap and others. For example, Market is simply the top level representation of all stocks, or the sea that carries, or sinks, all ships. You can monitor this level by looking at various indexes, ETFs and/or Funds. I use "VTI", the Vanguard Total Stock Market ETF. Sectors can be monitored using any number of containers, like Vanguard Sector Index Funds or ProShares Ultra Sector Indexes. I use the S&P SPDR Sector Funds. A list of those are listed below. Most of the techniques and indicators that deal with correlation and sector/market comparisons are not very detailed. Many simply overlay one price series over another, while you tediously follow the price lines from left to right trying to judge movement. Another critical piece missing from other compare tools is normalizing each data series. Hershey's CoCo does this, so you can have confidence that the alerts you see are based on accurate comparisons at every level. *********************************************** So let's get to the details! Hershey's CoCo currently compares 2 containers, so for this discussion we'll do Stock to Sector. You'll see arrows above and below some ticks of the price chart, plus a faint red or green background color. Very Bull = Blue Arrow = Stock and Sector prices are up, Stock price up more Bull = Green Arrow = Stock and Sector prices are up, Sector price up more Bear = Red Arrow = Stock and Sector prices are down, Sector price down more Very Bear = Black Arrow = Stock and Sector prices are down, Stock price down more Neutral = No Arrow = Stock and Sector price movement equal Arrow Length = Strength (the longer the arrow the bigger the difference) Green Background = Bull = Above zero Simple Moving Average of all arrow values Red Background = Bear = Below zero Simple Moving Average of all arrow values To review, the Blacks and Blues are the HEAVIEST pressure... the LONGER the STRONGER!
Pine Script® indicator
by bnh
8
Intramarket Correlator L-O-L-A excerptHere we have an intramarket correlator taken as an excerpt from the L-O-L-A institutional trading system. The plot displayed on the screen is the correlation index of the correlated security plotted against the security data series. Suggest simple line plots of contrasting colors. When the plot is below the security price this is an indication of a strong negative correlation. When the plot is above the security price this is indicative of a strong positive correlation. Provided for free by Tarzan at tradingview. or noprism@hushmail.com plz contact for more information on L-O-L-A *** Past performance is not necessarily indicative of future results *** Life is like a moving picture Nothing in life is a permanent fixture Ray Davies
Pine Script® indicator
by tarzan
Power Law Correlation Indicator 2.0 The Power Law Correlation Indicator is an attempt to chart when a stock/currency/futures contract goes parabolic forming a upward or downward curve that accelerates according to power laws. I've read about power laws from Sornette Diedler ( www.marketcalls.in ). And I think the theory is a good one. The idea behind this indicator is that it will rise to 1.0 as the curve resembles a parabolic up or down swing. When it is below zero, the stock will flatten out. There are many ways to use this indicator. One way I am testing it out is in trading Strangles or Straddle option trades. When this indicator goes below zero and starts to turn around, it means that it has flattened out. This is like a squeeze indicator. (see the TTM squeeze indicator). Since this indicator goes below zero and the squeeze plays tend to be mean-reverting; then its a great time to put on a straddle/strangle. Another way to use it is to think of it in terms of trend strength. Think of it as a kind of ADX, that measures the trend strength. When it is rising, the trend is strong; when it is dropping, the trend is weak. Lastly I think this indicator needs some work. I tried to put the power (x^n) function into it but my coding skill is limited. I am hoping that Lazy Bear or Ricardo Santos can do it some justice. Also I think that if we can figure out how to do other power law graphs, perhaps we can plot them together on one indicator. So far I really like this one for finding Strangle spots. So check it out. Peace SpreadEagle71
Pine Script® indicator
by SpreadEagle71
2