// TRADING TERMINOLOGY
What is Correlation?
A statistical measure of how two securities move in relation to each other.
In-Depth Explanation
Positive correlation means they move in the same direction; negative correlation means they move in opposite directions. Understanding correlation is vital for portfolio diversification.
Practical Example
"The Canadian Dollar (CAD) often has a high positive correlation with the price of oil."
Related Terms
Master the language of risk
Knowing the terms is just the start. Learning how to apply them is where the edge is found.
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