Copy five Popular Investors and your account feels diversified — five strategies, five sets of picks, risk spread around. But diversification isn’t about how many traders you copy. It’s about whether they move together. Copy five traders who all ride the same momentum and you haven’t spread your risk; you’ve concentrated it, five times over — and eToro won’t tell you.
The number that matters is correlation, not count
Two traders diversify each other only if they don’t rise and fall together. The way to measure that is correlation: line up each trader’s per-period returns and see how closely they track. A correlation near 1.0 means near-identical moves — when one has a bad month, so does the other. A correlation near 0 means they’re genuinely independent, and that independence is where diversification actually comes from.
On eToro’s most-copied Popular Investors, correlations are often far higher than they look. Two traders can market themselves as completely different — one “tech growth,” one “global macro” — and still post daily returns with a correlation near 0.9. The label is not the exposure.
They might literally hold the same book
Correlation tells you how two traders move; holdings overlap tells you why. Pull what each trader actually holds right now and compare — not by name, but by weight. Two traders who each put a third of their book into the same handful of large-cap names aren’t two bets. They’re one bet you’re paying to make twice.
This is the part that’s invisible from a profile page. eToro shows you each trader’s stats in isolation; it never lines two of them up side by side to show you the positions they share.
Score the whole basket, not just the pairs
Pairwise correlation is useful, but what you really want to know is: how concentrated is my whole basket? Roll the pairwise correlations up into a single score from 0 to 1. Under 0.3, the basket is genuinely diversified. Between 0.3 and 0.6, it’s worth watching. Above 0.6, you’re concentrated — most of your traders are making the same bet, and a single bad regime hits all of them at once.
One number won’t tell you what to do. But it will tell you the truth about whether the portfolio you think you have is the portfolio you actually have.
Compute with math, decide for yourself
None of this is a recommendation to drop a trader or copy a different one — that’s your call, and it depends on far more than correlation. The point is simpler: you can’t make that call well if you can’t see the concentration in the first place.
CopyAware computes the correlation, the holdings overlap, and the concentration score from eToro’s own public data, and puts the result in plain language. The math is deterministic and auditable; the plain-language read just explains it. What you do next is up to you — but at least you’ll be deciding with the whole picture, not a list of five names that only looked diversified.
CopyAware is informational only — not financial, investment, or trading advice, and not a recommendation to copy, hold, or drop any trader.
Copy trading and investing carry risk, including the loss of your capital. Past performance does not guarantee future results.