Correlation

You can choose whether or not to apply the Financial Settings Correlation parameter between loss distributions during an analysis. The default is Off.

If you enable correlation by selecting On, the loss engine applies the correlation and uncertainty defaults specified in the Loss Defaults section of the Administration Console. When you enable correlation, the following rules apply:

Single contract

Touchstone applies the Intra Correlation Factor between locations within (intra) a contract.

Multiple contracts

Touchstone applies the:

• Intra Correlation Factor between locations within (intra) a contract.

• Inter Correlation Factor between contracts in (inter) a portfolio.