Correlation
Correlation is the tendency of two bets to win or lose together rather than independently.
In plain English
Correlated bets multiply both the upside and the downside. Treating them as separate positions understates risk, because they tend to resolve in the same direction.
Example
An under on a game total and an under on the individual scoring totals within that same game.
Why it matters
A portfolio of correlated bets is far less diversified than the number of bets suggests.