Inverse Correlation

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Dictionary Says

Definition of 'Inverse Correlation'

A contrary relationship between two variables such that they move in opposite directions. In an inverse correlation with variables A and B, as A increases, B would decrease; as A decreases, B would increase. In statistical terminology, an inverse correlation is denoted by the correlation coefficient r having a value between -1 and 0, with r = -1 indicating perfect inverse correlation.

Also known as negative correlation.

Investopedia Says

Investopedia explains 'Inverse Correlation'

In financial markets, the best example of an inverse correlation is probably the one between the U.S. dollar and gold. As the U.S. dollar depreciates against major currencies, gold is generally perceived to rise, and as the U.S. dollar appreciates, gold declines in price.

Two points need to be kept in mind with regard to negative correlation. First, the existence of negative correlation (or positive correlation, for that matter) does not necessarily imply a causal relationship. Second, the relationship between two variables is not static and will fluctuate over time, which means that they may display an inverse correlation during some periods and a positive correlation during others.

Search results for

'Inverse Correlation'

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    ... The chart for MOO closely resembles the chart for USO, and the same theme
    of an inverse correlation to the dollar applies here. ...

  • An Introduction To Managed Futures

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    Their inverse correlation with stocks and bonds make these
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  • Climb The Bond Ladder To Higher Income

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    ... Inverse Correlation of Yields and Prices It's important to remember that
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  • Are oil prices and interest rates correlated?

    http://www.investopedia.com/ask/answers/08/oil-prices-interest-rates-correlated.asp
    ... drop. Thus, in this instance, there might be what we'd call an "inverse
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  • CFA Level 1 Study Guide - Quantitative Methods - Correlation and ...

    http://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/correlation-regression.asp
    ... Confidence Intervals; 2.24 Hypothesis Testing; 2.25 Interpreting Statistical
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  • Gold: The Other Currency

    http://www.investopedia.com/articles/forex/10/gold-the-other-currency.asp
    ... has often been thought of in relation to the US dollar, mainly because it is usually
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  • For Maximum Market Returns, Get Creative With Hedges

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    ... Double check correlation or inverse correlation to gauge the strength
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  • What exactly is a company's float?

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    ... It should also be noted that there is an inverse correlation between the size
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  • An Introduction To Real Estate Futures

    http://www.investopedia.com/articles/optioninvestor/11/an-introduction-to-real-estate-futures.asp
    ... the exchange. (Their inverse correlation with stocks and bonds make these
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  • Forces That Move Stock Prices

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    ... Historically, low inflation has had a strong inverse correlation with valuations
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