Correlation is a statistical measure, typically expressed as a value between -1 and 1, that describes how the returns of two assets move in relation to one another. A correlation near 1 means the assets tend to rise and fall together. A correlation near 0 means their movements are largely independent, and a negative correlation means they tend to move in opposite directions. Non-correlated assets are simply those whose price behavior isn't closely tied to the assets an investor already holds.
This concept matters because combining assets with low correlation is one of the few reliable ways to reduce overall portfolio volatility without necessarily sacrificing expected return. Private commercial real estate has historically shown lower correlation to public equities than many alternative asset classes, partly because it is valued through periodic appraisals rather than constant market trading. Adding non-correlated holdings to a stock-heavy portfolio can smooth performance across market cycles, which is why diversification-minded investors pay close attention to correlation when building an allocation.
Further reading: Best Places to Invest $100K in 2026
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