scan for etf/stocks with negative correlation to SPX

JACKSON

I'm trying to scan for etf/stocks that correlate negative to SPX.
I was using this scan below but it doesnt work.
I checked my scan results for 2022 against SPX which was bad for SPX but all the ETF scan results were equally bad,
Is there another way to find the negative correlated etf/stocks?

here's my scan:

[group is ETFNOUI]
AND [Correlation(200,$SPX) < 0]
RANK BY [Correlation(200,$SPX)]

thanks, Kevin

lmkwin

I get well over 100 results running it at the moment. The results all show a negative Correlation(200,$SPX) value. When I place the Correlation Indicator on the chart, it appears to be showing correlations that are < 0.

A stock can go up or down and have a negative correlation. If you are looking for more of a negative correlation then change the < 0 to a lower number, and see if the results you are expecting match up better with what you think you are looking for. Chartschool article suggest to use 0.50 for positive and -0.50 for negative as a starting point. Their examples are using the 20 and 50 period, but using the 200 should still give you a more "true" indication.

Correlation values are between 1 and -1.

Using -0.50 I get less than 100 results.

https://school.stockcharts.com/doku.php?id=technical_indicators:correlation_coeffici

Another feature in the StockCharts Chartlist views is the Correlation view. Most are familiar with the Summary view and the ChartList View, and maybe the CandleGlance view. Further down that dropdown list is Correlation view. You can select the Correlate with Symbol and a bunch of predefined periods. Unfortunately 200 days isn't a default in that view though.

lmkwin

And just an FYI, the old style MarketCarpet is an option in that ChartList View List As dropdown.

JACKSON

thanks! i got the scan to work and the results match what you have...
i was trying to find sectors that work inverse to SPX to use when SPX trends down...
none of the results really will work... maybe if I play with correlation period...
i'm trying to avoid using an inverse ETF but maybe that's the simplest way

thoughts?

lmkwin

What does "trends down" mean?

If looking for things that go up when the market goes down, the Correlation is good place to start but doesn't sound like what you are looking for. Identify what that "trends down" condition is. How long does it last? How does it start, and how does it end?

Once you have a definition of the "trends down" condition, you will have a starting point for things you can add as requirements to the scan. Your Market Trends Down scan. You can even set up an Alert to tell you when the running the Market Trends Down scan would be in order.

You may use the PriceRelative to identify securities that are outperforming whatever symbol you choose, over an short / intermediate / longer term in that Market Trends Down scan. You'd be best to limit your scan to using the periods where the market is in your "trends down" state. If you don't, you'll be seeing things that you aren't looking for.

In general, the "defensive" sectors do better when the market trends down.