Title

Intraportfolio Correlation: An Application For Investments Students

Document Type

Article

Publication Date

1-1-2013

Publication Title

Business Education & Accreditation

Department

Business and Leadership

Abstract

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

Volume

5

Issue

1

pp.

91-105

ISSN

1944-5903

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