Correlation

Correlation measures, between −1 and +1, how far two assets move together. Near +1 they rise and fall in step; near −1 they offset each other; near 0 they are independent. It is the basis of diversification, with one important caveat: in a crisis correlations tend to shoot towards 1, precisely when you most needed them not to.

See the full glossary · What the Celsmar financial terminal is

Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.