Sankey charts are a powerful tool for visualizing complex relationships. Instead of relying on rectangular bars to represent quantities, sankey charts use a more intuitive and visual layout to help you easily identify dependencies and flows between different elements. In this article, we will explore how to create and understand sankey charts and some of their applications in the field of finance.
First, let’s talk about sankey charts. Sankey charts are a specialized kind of diagram that is used for visualizing network relationships between different elements. It’s often used in finance to represent relationships between different assets, such as stocks, bonds, or loans. For instance, let’s say you’re analyzing the relationship between two companies. A sankey chart could represent the flows of money between each company, with each bar representing a specific amount of money. Other elements like the type of connection can be added to the chart to indicate the direction of the flow (e.g., debit or credit).
Creating sankey charts is relatively straightforward, and there are plenty of tools available to help you along the way. There are online tools like flowvis, flowchart, and even Excel that allow you to create simple sankey charts for free. With these tools, you can easily import data and create a sankey chart, which is the first step in understanding the different elements of the diagram.
Once you have created your sankey chart, you can add key elements to the diagram to provide specific interpretative details. This can include labels for each bar, text to describe the flow (e.g., “Company A is buying from Company B”), and additional information about each element. To customize your sankey chart, you can adjust the order of the elements, change colors, and add various shapes and formatting options.
One of the benefits of sankey charts is that they provide a more visual representation of complex relationships. In a sankey chart, each element represents a specific quantity, making it easier to identify where something stands in the diagram. This allows you to see the connections at a glance and understand the overall flow of the network.
Sankey charts also provide a lot of flexibility in terms of interpretation. You can choose the bars that are visible in each diagram, customize colors, and add information to each bar. This makes creating sankey charts very adaptable and lets you explore different perspectives on the network relationships between elements.
One of the applications of sankey charts is in supply chain management. By visualizing the flows between different companies in a network, you can gain insights into supply chain issues and inefficiencies. A sankey chart can help you identify where bottlenecks are and pinpoint where to focus your efforts to improve supply chain performance.
Another application is in finance, especially in investment analysis. By visualizing the relationships between different assets in a diagram, you can get a better understanding of how they interact and whether there are potential opportunities for diversification. Sankey charts can also help you identify potential asset swaps, which can be useful in risk management strategies.
In conclusion, sankey charts are a powerful and flexible tool for analyzing complex network relationships. With their intuitive layout and interpretative capabilities, sankey charts provide a simple yet powerful visual representation of relationships between different elements. Whether you’re analyzing the flow of money in a company’s supply chain, or looking to diversify your investments, sankey charts can be a valuable tool for understanding complex relationships.

SankeyMaster

SankeyMaster is your go-to tool for creating complex Sankey charts . Easily enter data and create Sankey charts that accurately reveal intricate data relationships.