Investing Terms and Concepts

Correlation is the degree to which asset and security prices move in tandem. Two highly correlated securities would have moved up and down together over a specific historical period. Two inversely correlated securities would have moved in different directions over a specific historical period.

Technical Analysis is the study of price and volume patterns in a specific security or market. Technical analysis relies mainly on price and volume trends and the study of charts to forecast the future movement of a security. The principal belief behind TA is that markets discount all available information, and that market participants behave in a predictable manner when confronted with information. Technical analysis is particularly useful when trends change and frequently sounds an early alert to buy or sell before Fundamental analysts have information.

NUA (Net Unrealized Appreciation) Strategy is a specific plan to deal with company options that can save the investor significant tax dollars. This strategy should be explored when an executive has a large amount of company options in tax deferred accounts.