Harry Markowitz famously quipped that diversification is the only free lunch in investing. What he did not say is that this is only true if correlations are known and stable over time. Markowitz’s ...

A few years have passed since we last published these asset class correlation matrices, but they're always interesting to take a look at. For reference, a correlation coefficient of 1 means the two ...

Investors regularly hear clichéd suggestions to diversify their portfolio by investing in assets with low correlations. However, it is not always clear what exact steps need to be taken to reap the ...

Understanding correlation in the context of investment is essential for creating a diversified portfolio that can withstand market fluctuations and enhance returns. Correlation measures how different ...

When it comes to constructing an investment portfolio, “negative correlation” is something of a holy grail. Diversification, investors are told, is about combining assets that behave differently. You ...

Correlations are some of the most basic pieces of information that help investors understand market moves and build portfolios. However, they lead to some of the most unwieldy estimation problems ...