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For some years now there has been considerable interest in the use of advanced mathematical techniques for pricing, hedging and trading financial products. Some of these techniques (e.g. chaos theory) have generally been received with much scepticism – although we do know of costly experiments which have proved disappointing, to say the least! Other techniques have become more generally acceptable – for example most financial institutions have facilities for GARCH and/or stochastic volatility analysis, and these are now commonly employed in many areas of risk management. But perhaps the most widely accepted technique of all is that of correlation, which has been extensively used in financial analysis for a very long time.