Correlation

Correlation is the relationship of how the value of one investment goes up or down in value as another asset also goes up or down. When the price of assets that comprise an asset class move in the same direction at the same time as those of another asset class, the two asset classes are considered to be positively correlated. When they move in opposite directions at the same time, they are considered to be negatively correlated. If they move in directions that have nothing to do with each other, then they are considered to be non-correlated. For more information read Alternative Asset Investments May Help When Stocks Decline.