The Lemon Fool

Are there any tools available to check correlation between two or more trusts? I know that one can check the holdings of trusts and make a judgment on that basis but if there were a tool available it would be a great help.

Yes. Morningstar have an X Ray tool, it has been referred to here and I've used it in the past, but I don't currently have a bookmark to it.

Having just looked, there seems to be an easily accessible version on their website, but that requires a subscription.

There should also be a free option, but I can't see it at the moment.

Staffordian

This may help - http://tools.morningstar.co.uk/uk/xray/editholdings.aspx?LanguageId=en-GB

Thanks for the responses and the Morninstar tool is good for portfolio construction and performance back testing but I am looking for something that shows the degree of correlation between funds. For example, if trust A is rising, what trust will, through market forces decline or rise less slowly.

Trustnet does. It gives a figure of between 1 and 0.

You have to add them to your basket then 'examine using trustnet tools' then 'comparison report'

@doug2500 thank you, I'd never seen that feature of Trustnet before.

So in simple terms if I were trying to diversify it would be a good idea to try and balance correlating and non-correlating assets so that, in principle, a two trusts/funds with a score as close to 0 (or even a negative value) as possible when compared to one another should provide balance?

doug2500 wrote:Trustnet does. It gives a figure of between 1 and 0.

You have to add them to your basket then 'examine using trustnet tools' then 'comparison report'

That's excellent, many thanks for that. What a pity that only four selections can be made.