Beyond performance, understanding the diversification properties of each asset — or the strength and direction of the linear relationship between assets — is another tool that investors use to pursue an improved risk/return profile. Adding assets that have a low correlation to each other also can provide diversification that helps investors seeking to optimize portfolio performance through cyclical and countercyclical market changes. As illustrated below, gold’s lower correlation over the past year to both global stocks and broad commodities, highlights gold’s potential to provide higher diversification efficiency on a relative basis compared to the broad movements of these asset classes.