What can be most critical for portfolio management? This is a Stock Correlation,A properly diversified portfolio of stocks contains stocks that have a low correlation with each other. This means that when one stock goes up, the other one usually goes down. This helps reduce the volatility of your investments. When done correctly, your diversified portfolio will have the same rate of return as a more risky investment without the jarring ups and downs in value.
Forex Correlation: If you have multiple positions that are highly correlated (positive value over 0.7) it means that pairs move somewhat in tandem. This means you may be overexposed to one currency, even though the risk on each position is managed.
Forex Correlation: If you have multiple positions that are highly correlated (positive value over 0.7) it means that pairs move somewhat in tandem. This means you may be overexposed to one currency, even though the risk on each position is managed.
