Pair Correlation Oscillator (Overlay)

Pair Correlation Oscillator (Overlay)

Overview
This open-source TradingView indicator computes the Pearson correlation coefficient between the chart's instrument (Ticker A) and a user-selected instrument (Ticker B). The correlation is displayed as an oscillator within the range −1..+1:

• +1 — perfect positive correlation
  
• 0 — no linear correlation
  
• −1 — perfect inverse correlation
  

Key features

• Default window: 500 bars (configurable)
  
• Option to compute correlation on log returns (recommended for comparing different instruments)
  
• Option to exclude the current unfinished bar (use previous completed bars only)
  
• Overlaid line + histogram columns for immediate visual interpretation
  
• Alert examples included (commented out) for high correlation thresholds
  

Inputs

• Ticker 2 — the other instrument to compare against (Ticker 1 is always the chart symbol)
  
• Correlation length — window in bars for the rolling correlation (default 500)
  
• Use log returns — converts price series to log returns before correlation (recommended)
  
• Exclude current bar — shift series by 1 to use only completed bars
  

How to use

• Add the script to your chart and set Ticker 2 to the instrument you want to correlate with the chart symbol.
  
• Choose Use log returns = true for price-to-price comparisons (it removes level bias).
  
• Optionally enable Exclude current bar for more stable signals if you do not want the live unfinished bar affecting results.
  
• Use the line/histogram and label shown on the chart to inspect correlation in real time.
  

Limitations & notes

• Correlation measures linear relationship over the chosen window — non-linear relationships won't be captured.
  
• Very different tickers (e.g., price scales, very low liquidity) may show noisy correlation; use returns and longer windows in such cases.
  
• This indicator is for information/analysis only — not trading advice.