#1  
20th September 2012, 11:51 AM
sreejitha t s
 
Join Date: Sep 2012
Posts: 3

What do you mean by Correlation?


what u meant by correlation?





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  #2  
17th January 2013, 12:15 AM
Tarunj94
Senior Member
 
Join Date: Jan 2013
Location: Earth
Posts: 321
Default Re: What do you mean by Correlation?

Hello friends,

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::::::::::::::Correlation:::::::::::

Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Perfect positive correlation (a correlation co-efficient of +1) implies that as one security moves, either up or down, the other security will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one security moves in either direction the security that is perfectly negatively correlated will move in the opposite direction. If the correlation is 0, the movements of the securities are said to have no correlation; they are completely random.

In real life, perfectly correlated securities are rare, rather you will find securities with some degree of correlation.


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