AG Pro Correlation Breakdown Map [AGPro Series]AG Pro Correlation Breakdown Map
Overview / What it does
AG Pro Correlation Breakdown Map is an overlay indicator designed to monitor whether a chart symbol is maintaining, weakening, breaking, or repairing its relationship with a benchmark symbol.
The default benchmark in this version is Bitcoin via BINANCE:BTCUSDT, which makes the tool especially useful for crypto traders who want to understand whether an altcoin is still moving in line with BTC or beginning to decouple from it.
This script does not attempt to answer whether correlation is simply high or low in isolation. Its purpose is more specific: it first checks whether a meaningful benchmark relationship existed, then evaluates whether that relationship is starting to deteriorate, whether the deterioration is becoming a confirmed breakdown, and whether the relationship is later stabilizing again.
The result is a regime-style map that helps users read benchmark dependency through distinct states such as coupled, strained, breaking, broken, repairing, and recoupled. This makes the script useful for contextual analysis, benchmark-relative behavior studies, and chart review workflows where users want more than a single rolling-correlation number.
Unique Edge
The main difference of this script is that it is not a generic correlation line, not a spread-trading engine, and not a simple benchmark overlay.
Its focus is the structure of relationship failure.
Instead of only plotting short-term correlation, the script combines four layers:
1. prior relationship validation,
2. short-vs-long correlation deterioration,
3. independent price behavior,
4. persistence and repair logic.
That combination is what separates a temporary wobble from a more meaningful benchmark breakdown event.
This also makes the script distinct from tools that measure correlation pressure or synchronized stress. Correlation Breakdown Map is built around the question: “A relationship existed before, but is it now failing, and if so, how cleanly?”
Methodology
The script starts by selecting a benchmark series and transforming price data into returns. Users can choose between log returns and percent returns.
A short correlation window and a long correlation window are then calculated between the chart symbol and the benchmark. The long window is used to judge whether a stable benchmark relationship has existed, while the short window is used to detect more recent deterioration.
The model then evaluates the gap between long and short correlation, along with short-correlation slope behavior. A benchmark relationship is considered more vulnerable when the short window weakens materially relative to the long window and the short-correlation slope also softens.
To avoid treating every statistical wobble as a true event, the script also checks for independent price behavior. This layer measures whether the chart symbol is beginning to move in a way that is meaningfully different from the benchmark over a configurable lookback period.
Finally, persistence and repair conditions are applied. This allows the script to separate brief instability from a more durable breakdown state, and later identify whether the relationship is beginning to normalize again.
Signals & Alerts / States
This script is primarily a state-mapping tool rather than a directional buy/sell engine.
The core states are:
Coupled
The chart symbol remains meaningfully aligned with the benchmark relationship structure.
Strained
The prior relationship still exists, but weakness is starting to appear.
Breaking
The relationship is under active deterioration and may be transitioning into a more meaningful failure.
Broken
The chart symbol is behaving as if benchmark linkage has materially weakened.
Repairing
The breakdown is no longer cleanly expanding, and the relationship may be stabilizing.
Recoupled
The benchmark relationship has improved enough to suggest that the prior structure is functioning again.
The Breakdown Score is used as a compact summary value. It is not intended to be interpreted as a trade signal on its own. It is a regime-strength readout that helps users compare the current condition of the relationship with the underlying state labels.
Key Inputs
Benchmark Symbol
Sets the comparison symbol. The default is BINANCE:BTCUSDT.
Benchmark Timeframe
Allows users to keep the benchmark on chart timeframe or compare against another timeframe.
Source
Selects Close, HLC3, or OHLC4 for the benchmark study.
Short Correlation Length / Long Correlation Length
Define the fast and slow windows used to evaluate current deterioration versus prior relationship structure.
Stable Relationship Threshold
Controls how strong the historical relationship must be before the script treats later weakness as a true breakdown candidate.
Breakdown Threshold / Repair Threshold
Control how strict the transition logic is for deterioration and recovery.
Min Long/Short Correlation Gap
Requires a meaningful difference between longer-term and shorter-term correlation before escalation.
Independent Move Threshold
Defines how much benchmark-relative price independence is required before the script treats the event as more than a statistical fluctuation.
Breakdown Confirmation Bars / Repair Confirmation Bars
Control persistence and confirmation sensitivity.
Visual Settings
Users can customize theme, visual intensity, panel font size, panel position, event visibility, trail visibility, and chart context density.
Limitations & Transparency
Correlation is a descriptive relationship metric, not a causal model.
A relationship breakdown does not automatically imply immediate continuation, reversal, trend acceleration, or trade opportunity. It only means the chart symbol is no longer behaving as consistently relative to the selected benchmark under the current settings.
Different assets, timeframes, and volatility regimes can produce different correlation behavior. A benchmark relationship that looks stable on one timeframe may be much less stable on another.
Short lookbacks can react faster but may create more noise. Longer lookbacks can be more stable but slower to react.
This script should be interpreted in the context of market structure, volatility, liquidity, and the chosen benchmark. It is a framework for reading relationship quality, not a guarantee engine.
Risk Disclosure
This indicator is for analytical and educational use.
It does not provide financial advice, does not predict future price direction, and should not be used in isolation for trading decisions. Users should perform their own analysis, validate settings on the markets they follow, and apply appropriate risk management.
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