Correlation is both a commonly used term in everyday life — where usage can be sloppy — and a scientific term where usage should be precise. Correlation refers to the degree to which two things are related to one another.

Without getting too technical, a correlation between two securities is perfect when a statistical calculation named the correlation coefficient is +1. A perfect negative correlation is -1, meaning the two securities move in opposite directions. A correlat

Many people are confused about what “carry trade” means and does not mean. Financial analysts talk endlessly about “the carry trade” and it is often difficult to figure out which carry trade they are talking about. A carry trade is typically a medium to

The term “market sentiment” really means two things: the market’s appetite for risk in general as well as market player’s desire to own a specific instrument. In currencies, a trader may wildly want to buy Aussie on expectations that the Reserve Bank of A

Each Friday, unless there is a holiday, the Commodity Futures Trading Commission, a US government agency (CFTC), releases what is called a Commitments of Traders Report (COT) on a wide array of currencies, commodities and interest rate futures. This revea