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What is correlation in finance?
Автор: Maybe Finance
Загружено: 2024-09-16
Просмотров: 146
Описание:
Correlation in finance measures how two investments move in relation to each other.
Another way to think of it is as "investment connection."
Imagine two dancers on a stage. If they move in sync, they have a positive correlation. If one moves left while the other goes right, they have a negative correlation. In finance, when two assets are positively correlated, their prices rise and fall together. When negatively correlated, one goes up while the other drops. Understanding correlation helps investors diversify and manage risk.
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