Notes on copy trading

Practical, honest writing on what actually diversifies a copied portfolio: correlation, holdings overlap and concentration, worked through with eToro’s own public data.

1 post, about 5 minutes of reading.

Copying five traders isn’t diversifying — here’s the math

Follow five Popular Investors and it feels like a spread-out portfolio. If they move together, it isn’t. Here’s how to measure the concentration hiding in a copied basket.

Read the postAugust 18, 20265 min readCopy trading

In this post

The terms these posts use.

The same definitions CopyAware computes in the product, from eToro’s public return history and holdings.

Diversified: Under 0.30
Worth watching: 0.30–0.60
Concentrated: Above 0.60

Return correlation: How closely two traders' per-period returns track each other. Near 1.0 they move as one; near 0 they're independent.
Holdings overlap: How much of two traders' live portfolios sits in the same positions, weighted by size. It explains why a pair is correlated.
Concentration score: One 0–1 number for a whole basket, rolled up from the pairs. It tells you how much of what you copy is really one bet.
CopyAware Score: Each trader's risk-adjusted quality, 0–100: return per unit of risk, consistency, and how many people copy them.

See them measured on real traders in the correlation and overlap demo, or browse every Popular Investor in the screener.