# Correlation

*Risk & Portfolio — Finicade finance glossary*

How closely two assets move together, on a scale from +1 (in lockstep) through 0 (unrelated) to −1 (opposite). It's the engine of diversification — combining assets that aren't perfectly correlated is what lowers a portfolio's risk.

**Related terms:** [Covariance](https://finicade.com/glossary/covariance), [Diversification](https://finicade.com/glossary/diversification), [Beta](https://finicade.com/glossary/beta), [Portfolio](https://finicade.com/glossary/portfolio)

**Taught in:** Charter Climb — Building the Efficient Frontier

Source: https://finicade.com/glossary/correlation