Correlation
A measure (−1…+1) of how much two assets' prices move together.
Correlation (the Pearson coefficient) measures the degree to which two assets' returns move together, on a scale from −1 to +1. +1 = perfectly in sync (they rise and fall in the same rhythm), 0 = no linear relationship (they move independently), −1 = opposite (one rises when the other falls). It is the foundation of real diversification. If all your positions are strongly positively correlated, holding many of them gives only the illusion of spread risk, in a sell-off they fall together. In crypto most altcoins are strongly positively correlated with Bitcoin, especially in panic, when correlations rise toward +1. Correlation is historical and changes over time, a value from one window may not hold in the next. It is a descriptive measure, not a basis for decisions.
In plain words
Tells you whether two coins move hand in hand. Near +1 = they move together (little benefit from holding both), near 0 = independently, below zero = in opposite directions.
Example
Two large altcoins with a +0.9 correlation are practically one bet, in a BTC sell-off both fall together. An asset with near-zero correlation to the rest of the portfolio truly spreads risk.
Also known as: correlation, korelacja, współczynnik korelacji, macierz korelacji, кореляція