correlation investment & finance definition
A
statistical concept that shows the tendency of two or more variables to change
their values at the same time, either in the same direction (positive
correlation) or opposite directions (negative correlation).
See correlation in Wall Street Words
The relationship between two variables during a period of time, especially one that shows a close match between the variables' movements. For example, all utility stocks tend to have a high degree of correlation because their share prices are influenced by the same forces. Conversely, gold stock price movements are not closely correlated with utility stock price movements because the two are influenced by very different factors. The concept of correlation is frequently used in portfolio analysis. See also
serial correlation.
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