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Finding Correlated Securities with the Correlation Screener

The Correlation Screener tool can be used to find both positively and negatively correlated holdings. As an example, it is a fairly safe assumption that the tanker shipping industry is going to be affected by the price of oil, so let’s look at how we could find a tanker shipping holding in HiddenLevers and how tightly it is correlated to the oil lever.
First, log in to your HiddenLevers account. From the Dashboard, click on the word “Analytics” in the black bar at the top of the screen, this will open a drop-down menu with “Correlation Screener” as the first option, please click on “Correlation Screener” (circled in red in the picture below):

This will open the “Correlation Screener” tool. The tool uses three stages to develop the screen and the output from each stage can change the displayed options for the subsequent stage. As we are looking for the correlation between tanker shipping and the price of oil, a lever in HiddenLevers, we need to select “Levers” as the initial parameter for the screen. To do so, click on the “Screen By” drop-down menu and select “Levers” (circled in red in the picture below):

Choosing that primary parameter type in the first stage of the screener now produces the initial options for stages two and three. Our next action is to select the lever “Oil” by clicking on the “Choose A HiddenLever” drop-down menu and selecting “Oil” (see picture below):

Having selected our lever, we then choose the settings for finding a positively correlated stock, looking for such a correlation over the period of the last two years, limiting the scope of the search to just stocks, and then narrowing the search most specifically by selecting the “Shipping, Tanker” option in the drop-down menu for “Industry” (see picture below):

As we have specified a stock the tool offers further criteria in stage three specifically for stocks rather than funds. In this example I have chosen not to move any of the sliders so as I do not have any limiting criteria, but it is possible to move the sliders to limit the range of age, market cap, volatility, etc., as desired by the user. Once I have made my choices I then click the blue “Run Screen” button to generate a list of matching stocks in HiddenLevers (see picture below):

The tool now displays the results at the bottom of the page. In the returned listing the chart symbol (circled in red in the picture below) can be clicked to generate a chart of the lever and correlated stock which can then be directly shared or used in reports: