Learn about correlation, including how it measures the relationship between securities, along with how it aids in diversifying your portfolio and risk management.

Correlation measures the relationship between two variables. Investors can use it to understand how one variable can move in relation to the other. Correlation is often used by technical analysts to ...

Correlation coefficients range from -1 to +1, indicating the strength of relationships between variables. Investors use correlation coefficients for portfolio diversification to reduce risk.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...