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

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. A negative correlation means that two variables ...

What Is the Correlation Coefficient? The correlation coefficient is a metric that measures the strength and direction of a relationship between two securities or variables, such as a stock and a ...

In the first case, there is a strong upward-sloping relationship between X and Y; in the second case, no apparent relationship; in the third case, a strong downward-sloping relationship. Note the ...