Perfect Negative Correlation
At a correlation of −1 the complete benefits of diversification are realised, the negative correlation term completely offsetting the combined variance terms, so that one unique combination of weights yields a zero risk…
This one is not written up yet
The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.
Written up from the same chapter
Where this is taught
Free preparation for NISM Series XIX-C← All terms