Title

"Intraportfolio Correlation": An Application For Investments Students

Document Type

Article

Publication Date

1-1-2012

Publication Title

Global Conference On Business & Finance Proceedings

Department

Business and Leadership

Abstract

"Intraportfolio correlation," a measure of portfolio diversification, is becoming increasingly popular among investment practitioners. However, far from providing the "free lunch" its adherents assert, the intraportfolio correlation is a simplistic and flawed measure that ignores material information about the relationships among portfolio assets. Deconstructing the intraportfolio correlation therefore can be a productive and educational exercise (and a cautionary tale) for students of portfolio theory. In this paper, we describe the measure and offer suggestions for incorporating it into an introductory investments course.

Volume

7

Issue

1

pp.

389-394

ISSN

1931-0285

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