Correlation

Risk Metrics

A statistical measure of how two investments move in relation to each other, ranging from -1.0 (perfect negative correlation) to +1.0 (perfect positive correlation). A correlation of 0 means the investments are independent. Low or negative correlations between portfolio holdings reduce overall portfolio risk through diversification. For example, equities and bonds historically have low positive correlation, providing ballast during market downturns.

Mentioned in this definition

Diversification

More in Risk Metrics

Bear MarketBetaBull MarketCalmar RatioDrawdownMaximum DrawdownSharpe RatioSortino RatioSystematic RiskVaR (Value at Risk)Volatility

Start a Conversation

Speak directly with the Founder and Fund Manager about the BWC Founders Fund, our systematic approach, and whether it aligns with your investment objectives.

Schedule a ConversationAccess the Investor Letter & Factsheet