Correlation is not an objective measure but depends on the sample; the real issue in decision-making is the relationship between changes in two variables under your observation, and understanding this requires accounting for the payoff function—the Kelly Criterion or entropy-maximizing frameworks show that low correlations are mostly noise and 0.5 is nowhere near halfway between 0 and 1 in terms of utility.

causalpending

Speaker

Nassim Nicholas Taleb

Evidence Quote

for betting and decision making it's not that it's more like uh a a fa Factor uh that's uh something like row Square 1us row square... so in other words very nonlinear in other words low correlations are are noise and uh and again 50 is not halfway between zero and one right and and one is infinity that's for decision making

Source

Nassim Taleb — Meditations on ExtremistanJoseph Noel Walker
Created: 8/11/2026, 7:44:21 AM

My Notes

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