5 November 2025
Reading a correlation matrix with trustees in the room
Heat maps impress; captions persuade. How we present index co-movement to non-specialist boards.
Trustees rarely want a seminar on eigenvalues. They want to know whether the Asia sleeve still helps when US equities fall. A matrix can answer that — if the room can read it in under a minute.
Caption before colour
We write a one-sentence caption above every chart stating the window, the denomination, and the decision the chart informs. Colour scales come second. If the caption cannot be spoken aloud in one breath, it is not ready for a board pack.
Limit the cast
Twelve indices already produce a busy grid. For trustee sessions we often show a reduced matrix of the six benchmarks that map to policy sleeves, with the full grid in an appendix for the investment team.
Leave a reservation visible
If a sample is short or a series was spliced, say so on the page. Boards forgive uncertainty that is labelled; they dislike discovering it in questions from the floor.