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Correlation

Correlation is a statistical measure that quantifies the extent to which the prices of two securities move in relation to each other. A correlation coefficient can be calculated to determine the strength of the relationship between the two securities. A high correlation indicates that the prices of the securities tend to move together, while a low correlation suggests that the prices move independently of each other.


Correlation analysis is commonly used in portfolio management to assess the degree of diversification between different investments.

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