Two positions that move together aren't really two positions.
They're one position wearing two different ticker symbols.
Most traders know that already, in theory. Fewer keep an actual reference of which common pairs have historically tended to move together, and which have tended to move opposite each other, so the idea gets checked before a trade goes on instead of after.
This sheet lays out the tendencies that show up across public trading education, things like the dollar and gold, stocks and bonds in a risk-off stretch, oil and energy names, worked onto one page you can glance at. There's a second page for writing down what you actually see over time, in your own words, with your own dates.
It isn't a live correlation calculator.
It isn't current data, either. Correlation between any two instruments moves constantly, and it can weaken or flip without warning.
A starting reference. Not a conclusion. Check current conditions yourself before assuming any of this still holds.
Reference only. Not a signal. Not investment advice.
A Trading Habits Tool
The Asset Correlation Reference Sheet
General tendencies between common asset pairs, and a page for what you actually observe.
- Format PDF, 6 pages, print or read on screen
- Covers General historical tendencies for common asset pairs
- Includes A blank correlation observations log for your own notes
- Delivery Instant download right after checkout
General reference only. Not current or live data.
What's Inside
What's Inside The Asset Correlation Reference Sheet
- 01A one-page summary of general tendencies commonly described in public trading and finance education, for pairs like USD and gold, stocks and bonds, and oil and energy stocks.
- 02Plain-English context on why correlation shifts, weakens, and sometimes reverses over time, instead of treating any pairing as fixed.
- 03A short explanation of why correlated positions behave more like one larger position than two independent ones.
- 04A blank "My Correlation Observations" log with columns for date, pair, and what you personally saw.
- 05Clear framing throughout that every relationship on the sheet is a general tendency, not a live or guaranteed reading.
- 06Guidance on where to check an actual, current correlation figure if you need one for real decision-making.
- 07A short "How To Use This Sheet" page up front, explaining what it does and doesn't do.
- 08One printable sheet. No login, no app, no subscription.
HABITS
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Behind The Tool
Where The Idea Of Correlation Comes From
The Concept
Correlation measures how closely two things move together, on a scale from -1 (perfect opposite movement) to +1 (perfect same-direction movement), with 0 meaning no relationship at all. Applied to two positions, a correlation near +1 means they're likely to rise and fall together, so holding both isn't really diversification. It's the same bet twice.
None of that describes what a pairing did last week. Correlation between any two instruments is not fixed. It drifts with the macro backdrop, and it can weaken or flip entirely during stress, which is exactly when traders most need it to hold.
Where It Comes From
The statistical correlation coefficient traces back to Francis Galton's work on heredity in the 1880s, formalized mathematically soon after by his student Karl Pearson, whose name is still attached to the standard formula used across finance today, the Pearson correlation coefficient.
Its use in portfolio construction owes the most to Harry Markowitz's 1952 paper "Portfolio Selection," which showed mathematically that combining assets with low or negative correlation could reduce a portfolio's overall volatility without necessarily reducing its expected return. That paper became the foundation of Modern Portfolio Theory and won Markowitz a share of the 1990 Nobel Prize in Economics.
Two Illustrative Shapes: Together vs. Opposite
Illustrative shapes only, not live prices: two lines rising and falling together on the left, two lines mirroring each other on the right. Real correlation is rarely this clean, and it drifts. Check current conditions before assuming either pattern still holds.
Try It: Markowitz's Own Diversification Math
Two equally weighted positions, each with the volatility you enter, combined using Markowitz's own 1952 formula: portfolio volatility = volatility × √(0.5 × (1 + ρ)). Drag ρ toward -1 and combined risk shrinks toward zero. Drag it to +1 and diversification stops doing anything at all, since two perfectly correlated positions are, risk-wise, the same bet twice.
Background only. The sheet itself lists general tendencies and gives you a page to log what you actually observe.
Common Questions
Who came up with the correlation coefficient used on this sheet?
Francis Galton's work on heredity in the 1880s laid the groundwork, and his student Karl Pearson formalized the math soon after. The Pearson correlation coefficient is still the standard formula finance uses today.
Why does correlation matter for diversification?
Harry Markowitz's 1952 paper "Portfolio Selection" showed that combining assets with low or negative correlation can reduce a portfolio's overall volatility without giving up expected return. It became the foundation of Modern Portfolio Theory and won Markowitz a share of the 1990 Nobel Prize in Economics.
Is a correlation number fixed once you look it up?
No. Correlation between any two instruments drifts with the macro backdrop, and it can weaken or flip entirely during stress, exactly when a trader most needs it to hold. That's why the sheet leaves room to log what you actually observe instead of treating one number as permanent.