Correlation

When a firm estimates about two new projects whether the firm should take both or not, the firm calculates its variance, expected value from the new projects, and volatility. To get those, the firm needs to get the correlation between the two new projects, and we call the correlation as “rho”. If the rho is a positive number, the each new project has positive effects on each other. For example, if a project A and a project B have rho 0.88, it means if the project A is succeed on its projects, then the project B is more likely to be succeed on its project. However, the rho cannot be more than positive 1 and less than negative 1. If the project A and B have a rho –0.88, it means the each project has negative effects on each other. For example, if the project A is succeed on its project, then the project B is more likely to fail in its project. If the rho is 0, it means they are not correlated each other, so the one project does not dependent on the other.
I think if a firm is thinking to start two or three new projects, the best scenario is open those three projects successfully. Thus, the firm should consider correlated between those projects whether those projects correlated positively, negatively, or uncorrelated. If those are correlated positively, it is easy to manage those projects together.

http://en.wikipedia.org/wiki/Correlation_(in_statistics)