GlossaryRisk
Correlation
What correlation means when several assets move together.
Plain-English definition
Correlation measures how strongly two assets tend to move in relation to each other.
Why it matters
It helps explain whether a portfolio is truly diversified or just looks diversified on the surface.
Beginner example
Several technology-heavy holdings may all fall together because they are exposed to similar drivers.
Common misunderstanding
Correlation can change, especially under stress.
In productPortfolio analysisRisk lessonsCommittee risk context
Practice with Alpha Council
Explain correlation and why it matters for diversification.
Not Financial Advice
This learn page is for education and research workflow guidance only. It explains concepts, metrics, and analysis steps used inside Alpha Council. It does not provide personalized investment advice, guaranteed outcomes, or automated trading instructions.