More than painting by numbers


Correlation, defined as the extent to which different assets or asset classes are affected by the same market conditions, is a key part of any risk-management strategy in a multi-asset trading environment. Correlation estimates are a crucial element of any hedge fund's investment strategy, both in terms of identifying opportunities and mitigating risk. After all, a key raison d'être for hedge funds is the ability to deliver returns that are uncorrelated to major market movements. However, ov