The Commitment

For the Lord God is a sun and shield: the Lord will give grace and glory: no good thing will
He withhold from them that walk uprightly. Psalm 84:11

Notice at the end of that verse it says, “them that walk uprightly.” God will withhold nothing
from them that walk uprightly. I believe withholding nothing is God’s best. But there is a
requirement to that. God requires that we walk uprightly.

Having God’s best sounds great. We all want to experience His best in our lives. But why isn’t
the body of Christ experiencing it? I believe the primary reason is because it requires a serious
commitment. It requires diligence and unwavering determination.

To have God’s best you must be willing to give Him your best.

This is where so many of God’s people fall short. We all want to have God’s best, but we are not
willing to give Him our best. Most Christians are not willing to make that kind of commitment.
You have to constantly ask yourself: How desperate am I for God’s best in my life?

I have found that desperate people will do desperate things. They will do whatever it takes to
change their situation. If you are truly desperate to have God’s best in your life then you will be
willing to do whatever the Word requires of you. It is not going to happen automatically. You
have to strive for it.

That’s what happened to me 46 years ago, I got desperate for change. I got tired of just existing. I
got tired of just barely getting by. I got tired of living from paycheck to paycheck. I got tired of
the devil stealing everything that I had worked hard for.

I was tired of feeling frustrated all the time. Are you at that place? Are you tired of just
surviving? Are you ready to experience God’s best for your life? Then say right now, “As for
me, I choose to have God’s best in my life.” When you truly understand this, then you will begin
to realize that having God’s best is a chosen and determined outcome.

Make a decision today and every day, to put God’s Word first and to walk uprightly before
Him! Remember when you do, He promises that no good thing will be withheld from you!

Author: Jerry Savelle

Let God Do It His Way

Oh, fear the Lord, you His saints! There is no want to those who fear Him. The young lions
lack and suffer hunger; but those who seek the Lord shall not lack any good thing. Psalm
34:9-10

The Word of God is clear: those who seek the Lord shall not lack any good thing. Notice this
verse does not say, “Those who seek what is in God’s hand shall not lack any good thing.” It
doesn’t say, “Those who seek what God can give them shall not lack any good thing.” And yet
there are believers who do this very thing.

You never have to chase down a good thing. The moment you seek the good thing, you
disqualify yourself from this particular promise of God.

Many people start off seeking God, and then get distracted when they see a good thing coming
on the horizon. They lose sight of God, and at the same time they disqualify themselves from the
promise.

Stay focused and committed to letting God do things His way. Let God bring you the good
thing you are believing for. If it is your good thing, He can and will bring it into your hand. You
do not need to chase it down.

When God puts something into your hand, no one can take it away. When God gives it to you,
you can rest secure in the knowledge that no devil, no person, and no negative situation can rob
you of what is rightfully yours.

Give God the opportunity to show Himself strong on your behalf. His Word promises that if
you seek Him you will not lack any good thing. So, let God do it His way.

Confession: I choose today to seek God, knowing that as I put Him first in my life He will see
to it that I do not lack any good thing!

Author: Jerry Savelle

Faith Conquers

When you begin to live a life of faith and to follow your dreams, adversity is sure to arise
because for the first time you’re dangerous to the adversary. As a result of your commitment
to follow God, two things will begin to happen immediately. First, your faith will grow. ...
August 31, 2025

The Commitment
For the Lord God is a sun and shield: the Lord will give grace and glory: no good thing will
He withhold from them that walk uprightly. Psalm 84:11 Notice at the end of that verse it says,
“them that walk uprightly.” God will withhold nothing from them that walk ...
August 30, 2025

Let God Do It His Way

Oh, fear the Lord, you His saints! There is no want to those who fear Him. The young lions
lack and suffer hunger; but those who seek the Lord shall not lack any good thing. Psalm
34:9-10 The Word of God is clear: those who seek the Lord shall not ...
August 29, 2025

Get Rid of the Fear!

There is no fear in love; but perfect love casts out fear, because fear involves torment. But he
who fears has not been made perfect in love. 1 John 4:18 NKJV Fear is the devil’s doorway into
the life of a believer. When you allow fear entrance into your life, ...
August 28, 2025

Our Distinguishing Mark

Walking in love should be the distinguishing mark of a believer. We represent Christ to the
world. The world needs something to see before they can believe. That is why God wants us to
walk in love. The world can’t see Christ, but they can see you. If they see ...
August 27, 2025
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Study Resources
  Life of Faith - Curriculum

Life of Faith - Curriculum

The Bible teaches us that it is impossible to please God without faith, so why wouldn’t
you want to ...

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 Prayer of Petition - Curriculum

Prayer of Petition - Curriculum

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is for any...

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Why God Wants You To Prosper - Curriculum

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Sickness and Disease is Part of the Curse

June 20, 2025
Christ has redeemed us from the curse of the law, having become a curse for us. Galatians
3:13

Sickness and disease were never part of God’s plan for mankind. When He created the
garden and placed Adam in it, life was perfect just as God planned it to be; there was no sickness
or disease. But because Adam sinned and opened the door to the devil, mankind was subjugated
to all that was part of the curse.

Until, that is, Jesus broke the power of the curse when He died on the Cross and rose again,
destroying all the power of the devil. This is good news, because sickness and disease no longer
have a right to be in your body.

Just as sickness and disease had no right to come on Jesus’ physical body when He walked on
the earth, so it has no right to come on your body today. However, the devil will attempt to bring
the curse upon your life and he will push you as far as you will allow him to. He will stay as long
as you let him.

The devil will not leave you voluntarily—you must evict him from your life! It will be
necessary that you tenaciously voice your rights as a child of God, enforce God’s Word against
him, and use your faith and the authority Jesus has given you to cast the devil out. Then, speak to
that sickness and disease and command it in the name of Jesus to leave.

Jesus paid the price for you to live in freedom from sickness and disease. So stand firm, speak
God’s Word, and enjoy the fullness of your redemption from the curse.

Confession: Because Jesus Christ has redeemed me from the curse, I have been set free from
all sickness and disease. I am full of the life and power of God.

Author: Jerry Savelle

What Does Correlation Mean In Trading

Strategies? Strategies and Risks

ByOddmund Groette August 7, 2025 Risk and money management

Correlation in trading strategies , which measures the relationship between two datasets, is an
essential variable for a trader. How your positions move in relation to other positions is crucial to
understanding and managing risk.
Correlation in trading means how your trading strategies perform together. The strategies
should not produce negative results at the same time or during the same time frame, but
rather make profits and losses independently from one another. This is one of the most
important aspects of trading, but also one of the most difficult.

Unfortunately, correlation is hard to predict because it’s not a static number but is constantly
changing. Moreover, during panics and volatility, most asset classes start moving in tandem.

Understanding the correlation among your trading strategies is very important. This article
briefly discusses what correlation is, how you can deal with it, and how to use it to your
advantage in developing trading systems and strategies. Correlation, or more correctly, the lack
of correlation, is the closest you get to a holy grail in trading.

Table of contents:

Key takeaways
 Correlation in trading strategies is important for traders, measuring the relationship
between two datasets. It indicates how your trading strategies perform together,
ideally aiming for strategies that make profits and losses independently from one another.
 Understanding correlation is important for managing risk because it helps you know how
your positions move in relation to others. It is considered one of the most important yet
difficult, aspects of trading.
 Correlation is a mathematical term that measures the relationship between two variables
without considering causation. The degree of correlation is expressed by a correlation
coefficient (r), which ranges from -1 to +1.
 A coefficient of 1 indicates perfect correlation (variables move in tandem).
 A coefficient of -1 indicates inverse correlation (variables move opposite one another).
 A zero coefficient means assets are uncorrelated.
 In trading, correlation is primarily used with time series data.
 Correlation risk is the danger of having a portfolio where strategies tend to move in
tandem, meaning if one strategy loses, others are likely to lose at the same time. Traders
aim for as low a correlation as possible among their strategies.
 Examples of “obvious” trading correlations include the price of oil and the Norwegian
krona (low oil price is bad), rising interest rates and lower share prices (inverse
relationship), and warm temperatures increasing ice cream demand.
 Many beginners ignore that a portfolio of trading strategies often has a high degree of
correlation. There is little point in having many strategies if they correlate frequently, as a
loss in one will likely lead to losses in others.
  Lack of correlation, or non-correlation, is considered the closest thing to a “holy grail” in
trading. This is because adding inversely correlated assets smooths the equity curve and
can lead to higher risk-adjusted performance. Brummer & Partner’s Multi-Strategy fund
is an example, achieving similar returns to the MSCI World Index but with much less
variability due to low correlation among its underlying funds.
 Correlations are not static; they change constantly. Two stocks might be highly correlated
over long periods but have low correlation over short periods. For instance, the
correlation between the S&P 500 and Nasdaq is very high over long time frames but can
“break down” over short periods, while the S&P 500 and long-term interest rates are
often inversely correlated. It’s often futile to try to understand why correlations change;
it’s more practical to accept that they come and go.
 Traders must be careful of spurious correlations found during backtesting, as many
relationships are indirect or due to chance and not causation. A common pitfall is the
error of omission, where a third, omitted variable explains a seeming correlation (e.g.,
storks and births are both related to population size).
 Survivorship bias is a significant error of omission in the stock market, where only
companies that have survived are analyzed, ignoring those that failed, which can distort
results.
 The goal in trading system development is to have strategies that cancel each other out to
lower return variability. To achieve low correlation and diversification, traders should:
 Develop quantified strategies.
 Trade different asset classes.
 Trade both long and short positions.
 Use different time frames in their strategies.
 Run a basket of many strategies that internally have low correlation

What is correlation in trading?

Correlation strategy

Correlation in trading is a mathematical term that measures the relationship between two
variables or datasets.

For example, the height of children tends to correlate to the height of the parents.

Likewise, your income mostly correlates to the amount of work you put in. It’s a statistical
measure that shows how two variables are related but without considering causation.
The degree of the correlation is expressed by the correlation coefficient, which ranges from -1 to
+1. In most statistical software, the coefficient is expressed as r. The significance of the
correlation is expressed as p. The more observations you make, the more powerful your
correlation is.

Something that is perfectly correlated has a correlation of 1. When the two variables correlate
inversely, ie. they move opposite one another, the correlation coefficient is -1. A zero correlation
coefficient means that the asset prices are uncorrelated.

In trading, the correlation is mostly used in time series data. Most stocks are highly correlated in
the stock market, meaning they move up and down in tandem.

Opposite, a rise in the interest rates leads typically to lower share prices, and thus the interest
rates and stocks are somewhat inversely correlated.

Unfortunately, correlations are not static – they change all the time. Two stocks could be highly
correlated over long intervals, but they might have a low correlation over short periods.

What is correlation risk in trading?

The correlation risk is the risk of having a portfolio of strategies that tend to move in tandem. If
you lose in strategy A, you have a high probability of losing in strategy B at the same time.

This is, of course, not optimal. You want to have as low a correlation as possible among your
strategies.

Examples of “obvious” trading correlations:

Perhaps some examples better illustrate what is meant by correlation in trading:

 The price of oil and the Norwegian krona (a low oil price is bad)
 The price of oil and the Canadian dollar (a low oil price is bad)
 The price of commodities and the price of the Australian dollar (Australia is a commodity
producer)
 Airline stocks and the price of oil
 The price of gold and the increase of the US dollar (USD) money supply
 Better than expected earnings result in increased share prices
 Low PE readings and later higher share price (inverse relationship)
 Rising interest rates and share prices (inverse relationship)
 Inventory increases and future sales (inverse relationship)
  When the price of goods drop, demand increases
 Warm temperatures increase the demand for ice cream

We hope you get the idea.

Why correlation in trading is important to understand

A portfolio of trading strategies most likely has a high degree of correlation but is often ignored
by beginners. Correlation is essential to understand for a trader!

There is no point in having, for example, ten different strategies if they correlate 80% of the
time. If you lose money in strategy 1, you most likely also lose in the other nine strategies (at the
same time).

To give a practical example of correlation in trading, we’d like to use a Swedish hedgefund
group, Brummer & Partner, as an example. They offer a fund of funds called Multi-Strategy, a
fund that invests in many asset classes using different time frames and portfolio managers. They
seek a return that is uncorrelated to the overall stock market. The total returns are summarized in
this graph:

Brummer & Partner’s return.

Source: Website.

The red line grows almost linearly toward the upper right corner, while the grey MSCI World
Index is a lot more erratic. Brummer has thus managed the same return as the MSCI World Index
but with a lot less variability in the returns.

The excerpt below shows the correlation between Brummer’s Multi-Strategy and the Swedish
Total Return Index (SIX) and MSCI World:
Trading correlation

The lower-left box shows the correlation at 0.14 and 0.19, which is pretty low (the graphs are in
Swedish).

Because one fund in the Multi-Strategy might have losses in one month, the other eight funds
might have different performance. Hence the overall performance of the Multi-Strategy has
minor drawdowns like shown in the monthly returns above.

However, when you start testing, you’ll find many seemingly interesting correlations that can
potentially make you successful. But beware:

Spurious correlations in trading:

Because most of the backtesting involves predicting future prices based on history, you will
likely find many spurious correlations. Many relationships are not direct but indirect.
Moreover, you have to be careful to conclude whatever you do because any test might result
from chance and not be proof of causation. Seemingly statistically significant correlations are
often due to chance or hidden factors.

Most of the actions in the markets are a result of noise and randomness. You can find many
relationships that are the result of chance.

Traders make the error of omission

In Victor Niederhoffer’s book Practical Speculation, he and Laurel Kenner mention the third
variable’s omission as one of the pitfalls when researching.

For example, the greater the number of storks, the greater the number of births.

However, districts with large stork populations have many births and have many buildings where
the storks can nest. Thus, it’s the population that explains both the frequency of births and
sightings of storks.

Victor Niederhoffer goes on to mention sentiment indicators. A typical sentiment indicator

becomes bearish when the sentiment reaches a certain optimistic level and vice versa.

But there is a strong negative/inverse relationship between the recent move and the subsequent
performance in the stock market. But at the same time, any sentiment indicator is positively
correlated with the recent market move.

Thus, when the market is up big over the previous weeks, sentiment tends to be optimistic, which
is bearish. Opposite, when the market is down, the sentiment changes to pessimistic, which is
bullish. Sentiment has an indirect relation to the future movements, but only because of its
connection with the recent market move.

A typical error of omission in the stock market is survivorship bias. Assume you want to test
some consumer staples and their performance, and you grab the first ten stocks in the XLP index.
But you are looking at the companies that have survived until now – you are omitting the ones
which might not have made it.

Likewise, many value investors make the same mistake. Value stocks often appear tempting
because they presumably might suffer only temporary difficulties, but this also increases the risk
for permanent financial difficulties and subsequent bankruptcy. Many end up on the graveyard,
and hence they never show up in any performance statistics.

Survivorship bias distorts results a lot!

Correlations in trading breakdowns – nothing lasts forever:

Correlations vary over time. Something that is highly correlated over long intervals might be
erratic on a shorter time frame:
Correlation in trading

The lower pane on the chart shows the 10-day correlation (red line), while the black line shows
the 100-day correlation. The correlation is very high over long time frames but tens to “break
down” over a few days.

Opposite, the correlation between the S&P 500 and long-term interest rates is much lower:
Correlation trading

The chart above shows the 10- and the 100-day correlation between the ETFs SPY and TLT. The
black line, the 100-day average, is most of the time negative, as expected due to the inverse
relationship between stock market valuation and rates.

Should you understand why trading correlations change?

There are many reasons why correlations break down and change. Sentiment and global factors
change all the time, and luckily the world is not static.

We would like to understand why things change, but we believe this is a pretty futile exercise
that will keep you occupied 24/7. We think it makes more sense to accept that correlations come
and go.

Non-correlation and diversification – the holy grail in

trading?
The goal in trading system development is to have strategies that cancel each other out to lower
the returns’ variability – we can call it correlation trades. To do this, you need to include various
asset classes, trade both long and short, and use different time frames in your trading strategies.
Even long-only trades done during a bear market can add diversification and profitability when
the time frame is short.

Trading correlation can be used as a tool in strategy development. As a trader, you can use
correlations to estimate the price tomorrow, next week, or next month.

ETFs and futures can be used as variables to predict the price of another asset. If you subscribe
to our Trading Edges, you’ll get some ideas on how to use this to your advantage in forthcoming
Trading Edges:

Trading correlations, or more correctly, the lack of correlation, is the closest you get to a “holy
grail” in trading.

Moreover, inversely correlated assets are just as valuable. Why? Because adding instruments that
are lowly correlated smooths the equity curve.

A perfect example of that is the example above in Brummer & Partners. Because of their high
risk-adjusted performance, indicated by the Sharpe Ratio, they can use leverage to boost returns.
Brummer’s Multi-Strategy fund is offered both without leverage and 2x leverage.

Conclusion – What does correlation mean in trading?

Correlation in trading refers to how your strategies perform together. In trading, you want a
low correlation between your trading strategies.

To succeed, we recommend having a basket of many strategies – a portfolio of many strategies –

that internally has a low correlation.

You add diversification and decrease correlation in trading by thinking like this:

 Learn to code so you can use trading software and develop quantified strategies.
 Quantitative trading makes you systematic and disciplined. Backtesting works.

 There are practically no limitations on how many strategies you can run automatically (as
long as you are well funded).
 Trade different asset classes.
 Trade both long and short. Short selling is difficult but offers very good risk mitigation in
a portfolio.

 Trade different time frames.

FAQ:
– How does correlation work in trading strategies?

In trading, correlation refers to how different trading strategies perform together. Ideally,
strategies should not produce negative results simultaneously but instead generate profits and
losses independently.

– How does correlation impact portfolio performance?

A high degree of correlation in a portfolio can lead to simultaneous losses. To enhance portfolio
performance, traders aim for strategies with low internal correlation.

– Can correlation be used as a tool in trading strategy development?

Yes, trading correlations can be a valuable tool in strategy development. Traders can use
correlations to estimate future prices and incorporate various asset classes and time frames for
diversification.
 Written By: Oddmund Groette

Fact Checked By: Håkan Samuelsson

Video Testimonials From Recent Customers

Disclaimer: No part of the analysis in this blog constitutes a trade recommendation. It’s all
published for informational and educational purposes only. The past performance of any trading
system or methodology is not necessarily indicative of future results.

Read the full disclaimer here.

 Disclaimer: No part of the analysis in this blog constitutes a trade recommendation. It’s all
published for informational and educational purposes only. The past performance of any trading
system or methodology is not necessarily indicative of future results.

Read the full disclaimer here.

-----------------------------------------------------------------

Oddmund Groette

I’ve got an Msc from Heriot-Watt University, Edinburgh (1996), in addition a to a business
administration degree the Norwegian School of Management (BI – 1994). Did my mandatory
military service in between.

After university, I worked two years as an auditor (1996-1998).

I co-founded Aksjeforum.com in 1998/99 - one of the first websites about trading and investing
in Norway. It was later acquired by Digi.no in 2001.

I have written 4 books about trading (in Norwegian). One of them has sold 30,000 copies, a
record for a financial book in Norway.

From 2001 until 2018 full-time independent prop trader (Series 7 in 2001) and investor.

2018-today: Investor, writer, analyst.

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