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

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J Catalano is a CFP and Registered ...

Correlation analysis in portfolio management design is overrated. There isn’t much benefit derived from relying on low correlation among asset classes to achieve excess return. The best way to use ...

Now let’s examine the correlation between Chevron’s (CVX) stock, crude oil, and natural gas prices. The correlation coefficient shows the relationship between two variables. A correlation coefficient ...

Here’s the cure to being duped again. It’s a site called Spurious Correlations by Tyler Vigen–or more accurately, Tyler Vigen’s software. He created code to spot correlations in public data sets and ...

You've probably noticed certain things that have a clear relationship with one another. For example, the amount of petrol your car uses increases along with the number of kilometres you drive. Or, if ...

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in. The content of this article is provided for information ...