I'm writing a little program to explore the relationship/correlation between a stock's current price and its historical seasonality. I'm using the correlation to compare the daily close % returns of each for 60 days, and sometimes the resulting correlation figure is a little confounding. I'm certainly no statistics expert and I could very well be doing something wrong, but I've checked and double-checked my numbers in Excel, and also a free online stats site (www.socscistatistics.com) and my data seem fine. Anyway, I'll submit to you here please, one stock example that has me scratching my head.
Here is a screenshot of a line-chart of the last 60 closes of a stock (TTWO, in green), compared to its 21-year historical average seasonal moves for that same trading day (in yellow).
To be sure, they are certainly not 100% in synch with each other, but the correlation is -0.22. Given the general upward bias of both lines, I would have expected at least a positive number, albeit weak. This confounds me. I had thought correlation would be the metric to use for this test, but maybe I just need to use another statistic (like regression analysis?) to better show the relationship. If there is a better metric to use, please recommend!
Also, I would have liked to attach a small file of my data (60 numbers for each of the stock and its seasonality), but can't see how to do that.
Update Feb. 26: Clicking on "Add a comment" seems to do nothing (just auto-scrolls the page up), so it seems like editing my question was the only way i could reply. Anyway, thanks to Dave and Nick for the replies. I'm ideally looking for a statistical measure to quickly and roughly enumerate the relationship between each stock and its seasonality. I can see correlation is not perfect and there will always be "head-scratchers" like the example I gave - that's just the nature of the beast. Instead of trying to compare DAILY % change with correlation, I tried using WEEKLY % changes - figuring the "broader" outlook would at least reveal the common upward positive bias. However, it yielded an even larger negative value of -25.5, so that was surprising. Would there be a "better" metric for me to use for what I'm doing? Thanks.