Correlation is a number between 1 and -1.

Positive Correlation

If two assets are positively correlated their value will move in the same direction – they will move up and down together. Perfectly correlated assets (correlation of 1) will move in the same direction at the same rate.

Negative Correlation

If two assets are negatively correlated their value will move in the opposite direction – if one goes up the other will fall. Assets with perfect negative correlation (correlation of -1) will move in the opposite direction at the same rate.

No Correlation

If there is no correlation between assets they are not related in any way and therefore the rises and falls in their values will not be linked. A correlation of 0 indicates no correlation.