Correlation
A statistical measure of how two variables move in relation to each other, ranging from -1 to +1.
Correlation of +1 means two variables move perfectly together (when one goes up, the other always goes up). Correlation of -1 means they move perfectly opposite. Correlation of 0 means no linear relationship. Stock market correlation matters for diversification — owning assets with low or negative correlation reduces portfolio risk. Important: correlation does not imply causation. Ice cream sales and drowning deaths are correlated (both increase in summer) but one does not cause the other.