What is Negative Correlation ?

If two variables are associated and an increase in one corresponds to a decrease in the other then we have a negative correlation.
SS - downward line
scattergram



Perfect Negative Correlation

If the returns on two assets are perfectly negatively correlated then they move in opposite directions.
Risk and expected return can cancel each other out.
Risk would be eliminated completely if you had equal amounts of two perfectly negatively correlated assets








© 2021 Better Solutions Limited. All Rights Reserved. © 2021 Better Solutions Limited TopPrevNext