Variant Analysis
Correlation, diversification, and optimal variant selection across all 15 strategies
The correlation matrix shows which strategies move together (red) vs independently (blue). Picking strategies from different clusters gives better diversification. New here? Start with the Getting Started Guide or check the Glossary for unfamiliar terms.
Data from 60 trading days of daily equity curves
Avg Pairwise Correlation
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All 15 variants compared
Max Correlation Pair
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Most similar
Min Correlation Pair
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Most different
Intra-NET Correlation
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6 taxable variants
Intra-IRA Correlation
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6 IRA variants
Cross-Group Correlation
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NET vs IRA groups
Pairwise Return Correlations
15x15 matrix of daily return correlations between all strategy variants. Blue indicates low correlation (diversifying), red indicates high correlation (overlapping).
Variant Clustering
Variants grouped by correlation similarity using hierarchical clustering (0.70 threshold). Similar variants within the same cluster will move together.
Cluster 1: Core Growth Strategies
Cluster 2: Balanced Approaches
Cluster 3: Conservative/Divergent
Risk-Return Profile
Scatter plot of annualized volatility (X-axis) vs. total return (Y-axis). Each variant is colored by group. Efficient frontier reference line shown in gray.
Top Correlation Pairs
Strongest and weakest correlations between variant pairs.
| Pair | Correlation | Type | Interpretation |
|---|
Key Insights
- •Diversification benefit: Low cross-group correlation (NET vs IRA) suggests good portfolio diversification when combining taxable and IRA strategies.
- •Within-group similarity: Higher intra-group correlations indicate that variants within the same account type follow similar market patterns.
- •Cluster composition: Variants in the same cluster will tend to rise and fall together, so holding multiple clusters provides better diversification.
- •Risk-adjusted selection: Consider combining variants from different clusters and account types to maximize diversification and reduce drawdown correlation.