Overlapping area represents the amount of risk that can be diversified away by holding S&P 500 and NZSE in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on NZSE and SP 500 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on S&P 500 are associated (or correlated) with NZSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NZSE has no effect on the direction of SP 500 i.e. SP 500 and NZSE go up and down completely randomly.