Correlation and CorrelationEx
Author: Ruschem
Creation Date: 1/2/2012 5:14 PM
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Ruschem

#1
I didn't quite understand these two indicators, in particular, correlation of what and what do they plot? I like using correlations. The best charting for correlation can be found on StockChars.com - they made it a standard indicator. At stockcharts.com one can plot correlation of the active symbol and another symbol of your choice. That would be a good first step in improving the correlation indicators in WLPro/community indicators. Another useful feature would be plotting correlation of two external symbols.
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Eugene

#2
If you don't understand the meaning of an indicator, follow its "More info..." link label -- available for any indicator listed on the Indicators list.

In particular, Correlation.
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Ruschem

#3
Eugene,

I know well enough what the correlation is and use it. What I don't understand is how the correlation works in the community indicators section. It doesn't plot the correlation as we know it. It doesn't give you an option to compare to a different symbol and that's my point. What it compares the active symbol with is my question. If you read my post again carefully you will see that I was asking for an easy to use buit-in indicator and not for a definition. Thank you anyway.
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Eugene

#4
While I do not know who are "we" and how "we" are used to know Correlation, but Correlation returns pretty standard Pearson's Correlation Coefficient between the two specified data series, x and y. In other words, you can specify the Close of the current Bars and the Close of an external symbol. Makes sense?
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Ruschem

#5
Yes, I see it all in the link that you provided and will use the script. Thank you for that. But the built-in indication in the Community indicators section doesn't do the job correctly and it doesn't tell me what it compares my symbol with whan I drag and drop it.
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Eugene

#6
The indicator does its job perfectly. It's just not intended to be used with drag and drop. Its possibilities are uncovered by using it in code.

This is caused by the limitation I was talking about to you in a number of threads. If you want to use Correlation (and the Beta), it makes sense to do that in code-based strategies. Hope that helps.